UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. [2])*
MONACO FINANCE, INC.
-------------------------------------------------------------------------------
(Name of Issuer)
Class A Common Stock
Class B Common Stock and
8% Cumulative Convertible Preferred Stock, Series 1998-1
- --------------------------------------------------------------------------------
(Title of Class of Securities)
Class A Common Stock - 608868-105
Class B Common Stock - None
8% Cumulative Convertible Preferred Stock, Series 1998-1 - None
- --------------------------------------------------------------------------------
(CUSIP Number)
Cathryn L. Porter, Chief General Counsel
Pacific USA Holdings Corp.
3200 Southwest Freeway, Suite 1220
Houston, Texas 77027 (713) 871-0111
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
March 4, 1998
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
- ------------------------------------------------------------------------------
CLASS A COMMON STOCK CUSIP No. 608868-105
CLASS B COMMON STOCK CUSIP NO. NONE
8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES 1998-1 CUSIP NO. NONE
- ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pacific USA Holdings Corp.
IRS Identification No. 75-2255876
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X] (b) [ ]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
- ------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 2,311,152 shares of Class A Common Stock
OWNED BY 1,273,715 shares of Class B Common Stock (3 votes
per share)
EACH ----------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
- ------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,311,152 shares of Class A Common Stock
2,433,457 shares of 8% Cumulative Convertible
Preferred Stock, Series 1998-1
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
- 2,311,152 shares of Class A Common Stock (See Item 5)
- Option to purchase, coupled with an irrevocable proxy to vote,
830,000 shares of Class B Common Stock (3 votes per share)
- Limited power to direct the exercise of voting power with respect
to 443,715 shares of Class B Common Stock (3 votes per
share)
- 2,433,457 shares of 8% Cumulative Convertible Preferred Stock,
Series 1998-1 which are convertible into 1,216,728 shares of
Class A Common Stock (See Item 3)
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
51.8%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- ------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
- ------------------------------------------------------------------------------
CLASS A COMMON STOCK CUSIP No. 608868-105
CLASS B COMMON STOCK CUSIP NO. NONE
8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES 1998-1 CUSIP NO. NONE
- ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pacific Electric Wire & Cable Co., Ltd.
IRS Identification No. -- N/A -- Foreign Corporation
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X] (b) [ ]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Taiwan, Republic of China
- ------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 2,311,152 shares of Class A Common Stock
OWNED BY 1,273,715 shares of Class B Common Stock (3 votes
per share)
EACH ----------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
- ------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,311,152 shares of Class A Common Stock
2,433,457 shares of 8% Cumulative Convertible Preferred
Stock, Series 1998-1
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
- 2,311,152 shares of Class A Common Stock
- Option to purchase, coupled with an irrevocable proxy to vote,
830,000 shares of Class B Common Stock (3 votes per share)
- Limited power to direct the exercise of voting power with respect
to 443,715 shares of Class B Common Stock (3 votes per share)
- 2,433,457 shares of 8% Cumulative Convertible Preferred Stock,
Series 1998-1 which are convertible into 1,216,728 shares of Class
A Common Stock (See Item 3)
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
51.8%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
<PAGE>
SCHEDULE 13D
- ------------------------------------------------------------------------------
CLASS A COMMON STOCK CUSIP No. 608868-105
CLASS B COMMON STOCK CUSIP NO. NONE
8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES 1998-1 CUSIP NO. NONE
- ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Consumer Finance Holdings, Inc.
IRS Identification No. 75-2704763
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X] (b) [ ]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada
- ------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 2,311,152 shares of Class A Common Stock
OWNED BY 1,273,715 shares of Class B Common Stock (3 votes
per share)
EACH ----------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
- ------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,311,152 shares of Class A Common Stock
2,433,457 shares of 8% Cumulative Convertible Preferred
Stock, Series 1998-1
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
- 2,311,152 shares of Class A Common Stock
- Option to purchase, coupled with an irrevocable proxy to vote,
830,000 shares of Class B Common Stock (3 votes per share)
- Limited power to direct the exercise of voting power with respect
to 443,715 shares of Class B Common Stock (3 votes per share)
- 2,433,457 shares of 8% Cumulative Convertible Preferred Stock,
Series 1998-1 which are convertible into 1,216,728 shares of Class
A Common Stock (See Item 3)
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
51.8%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- ------------------------------------------------------------------------------
SCHEDULE 13D
- ------------------------------------------------------------------------------
CLASS A COMMON STOCK CUSIP No. 608868-105
CLASS B COMMON STOCK CUSIP NO. NONE
8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES 1998-1 CUSIP NO. NONE
- ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pacific Southwest Bank
IRS Identification No. 74-2520389
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X] (b) [ ]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
- ------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 811,152 shares of Class A Common Stock
OWNED BY
EACH ----------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
- ------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
811,152 shares of Class A Common Stock
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
- 811,152 shares of Class A Common Stock
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.1%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- ------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
- ------------------------------------------------------------------------------
CLASS A COMMON STOCK CUSIP No. 608868-105
CLASS B COMMON STOCK CUSIP NO. NONE
8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES 1998-1 CUSIP NO. NONE
- ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pacific Financial Group, Inc.
IRS Identification No. 51-0350769
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X] (b) [ ]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 811,152 shares of Class A Common Stock
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
- ------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
811,152 shares of Class A Common Stock
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
- 811,152 shares of Class A Common Stock
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.1%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- ------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
- ------------------------------------------------------------------------------
CLASS A COMMON STOCK CUSIP No. 608868-105
CLASS B COMMON STOCK CUSIP NO. NONE
8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES 1998-1 CUSIP NO. NONE
- ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
First CF Corp.
IRS Identification No. 75-2672933
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X] (b) [ ]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
- ------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 811,152 shares of Class A Common Stock
OWNED BY
EACH ----------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
- ------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
811,152 shares of Class A Common Stock
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
- 811,152 shares of Class A Common Stock
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.1%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- ------------------------------------------------------------------------------
<PAGE>
1. Security and Issuer.
This Statement relates to the Class A common stock, $.01 par value ("Class
A Common Stock"), the Class B common stock, $.01 par value ("Class B Common
Stock"), and the 8% Cumulative Convertible Preferred Stock, Series 1998-1
("Preferred Stock"), of Monaco Finance, Inc., a Colorado corporation ("Issuer"
or "Monaco"). The Class A Common Stock is registered pursuant to Section 12(g)
of the Securities Exchange Act of 1934, as amended. Each share of Preferred
Stock is valued at $2.00 and is convertible into one-half share of Class A
Common Stock at any time. The address of the Issuer's principal executive
offices is 370 Seventeenth Street, Suite 5060, Denver, Colorado, 80202.
2. Identity and Background.
(a) Name: This Statement is being filed by Pacific USA Holdings Corp.,
a Texas corporation ("Pacific"), Pacific Electric Wire & Cable Co., Ltd., a
Taiwanese limited company ("Pacific Electric"), Consumer Finance Holdings, Inc.,
a Nevada corporation ("Consumer"), Pacific Southwest Bank, a federal savings
bank ("PSB"), First CF Corp., a Texas corporation ("First CF"), and Pacific
Financial Group, Inc., a Delaware corporation ("Pacific Financial") and is
intended to amend the prior Schedules 13D filed separately by Pacific, Pacific
Electric, and Consumer on or about May 6, 1997 and an Amendment No. 1 to that
Schedule 13D filed jointly by Pacific, Pacific Electric, and Consumer on
December 4, 1997. Pacific, directly and indirectly, is a wholly owned
subsidiary of Pacific Electric. Consumer is a wholly owned subsidiary of
Pacific. Pacific Financial is a wholly owned subsidiary of Pacific. PSB is a
wholly owned subsidiary of Pacific Financial. First CF is a wholly owned
subsidiary of PSB. The executive officers and directors of Pacific, Pacific
Electric, Consumer, PSB, Pacific Financial, and First CF (hereinafter
collectively referred to as "Reporting Person") are set forth in Item 2(c) of
this Statement. The filing of this Statement shall not be construed as an
admission that Reporting Person, or any executive officers or directors is, for
the purposes of Section 13(d) or 13(g) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), the beneficial owner of any securities covered
by this Statement or that this schedule is required to be filed by such persons.
(b) Business Address: The business address of Pacific and Consumer is
5999 Summerside Drive, Suite 112, Dallas, Texas 75252. The business address of
PSB is 800 N. Shoreline Blvd., Suite 200 South Tower, Corpus Christi, Texas
78401. The business address of Pacific Financial is c/o The Corporation Trust
Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801. The business address of First CF is 4144 North Central Expressway, Suite
106, Dallas, Texas 75204. The business address of Pacific Electric is 4th Fl.,
285 Chung Hsiao East Road, Section 4, Taipei, Taiwan, Republic of China. The
business address of Reporting Person's respective executive officers and
directors are set forth in Item 2(c) of this Statement.
(c) Present Principal Occupation or Employment: Pacific is a
diversified holding company engaged in the financial services, real estate and
technology industries. Pacific Electric is a general business conglomerate
founded on the electric cable and wire industry, engaged in manufacturing,
telecommunications and technology. Consumer is a holding company engaged in
consumer finance. PSB is a federal savings bank. Pacific Financial is a
federal savings bank holding company. First CF is a financial services holding
company. The present principal occupation or employment of Pacific's, Pacific
Electric's and Consumer's respective executive officers and directors and the
name and address of any corporation or other organizations in which such
employment is conducted are as follows:
<PAGE>
<TABLE>
<CAPTION>
Board of Directors of Pacific
-----------------------------
Present Principal
Name Business Address Occupation Citizenship
- --------------- --------------------------------------- --------------------------- -------------
<S> <C> <C> <C>
Tung Yu-jeh Pacific Electric Wire & Cable Co., Ltd. Chairman of the Board Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Sun Tao-tsun Pacific Electric Wire & Cable Co., Ltd. President Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Hu Hung-chiu Pacific Electric Wire & Cable Co., Ltd. Executive Vice President Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, and Chief Financial Officer
Section 4 Pacific Electric Wire &
Taipei , Taiwan, Republic of China Cable Co., Ltd.
Lee Pon-yean Pacific Electric Wire & Cable Co., Ltd. Vice President Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Tung Ching-yun c/o Pacific USA Holdings Corp Vice President, Pacific Taiwan, ROC
5999 Summerside Drive, #112 Electric Wire & Cable Co.,
Dallas, Texas 75252 Ltd., and Vice President
Pacific USA Holdings
Corp.
Larry D. c/o Pacific USA Holdings Corp Chief Executive Officer United States
Horner 5999 Summerside Drive, # 112 PUSA Investment
Dallas, Texas 75252 Company
Bill C. Bradley c/o Pacific USA Holdings Corp Chief Executive Officer United States
5999 Summerside Drive, #112 Pacific USA Holdings
Dallas, Texas 75252 Corp.
</TABLE>
<TABLE>
<CAPTION>
Board of Directors of Pacific Electric
--------------------------------------
Present Principal
Name Business Address Occupation Citizenship
- --------------- --------------------------------------- --------------------------- -----------
<S> <C> <C> <C>
Tung Yu-jeh c/o Pacific USA Holdings Corp Chairman of the Board Taiwan, ROC
5999 Summerside Drive, # 112 Pacific Electric Wire &
Dallas, Texas 75252 Cable Co., Ltd.
Lee Yu-tien Pacific Electric Wire & Cable Co., Ltd. Vice Board Chairman Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Sun Chen Shu- Pacific Electric Wire & Cable Co., Ltd. Executive Director Taiwan, ROC
chuan 4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Cheng I-chou Pacific Electric Wire & Cable Co., Ltd. Executive Director Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Chiao Ting-piao Pacific Electric Wire & Cable Co., Ltd. Executive Director Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Sun Tao-tsun Pacific Electric Wire & Cable Co., Ltd. President Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Hu Hung-chiu Pacific Electric Wire & Cable Co., Ltd. Executive Vice President Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, and Chief Financial Officer
Section 4 Pacific Electric Wire &
Taipei, Taiwan, Republic of China Cable Co., Ltd.
Lee Chao-chun Pacific Electric Wire & Cable Co., Ltd. Director Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Lee Pon-yean Pacific Electric Wire & Cable Co., Ltd. Vice President Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Liu Wei-kang Pacific Electric Wire & Cable Co., Ltd. Director Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Tung Ching-yun c/o Pacific USA Holdings Corp Vice President Taiwan, ROC
5999 Summerside Drive, 9112 Pacific USA
Dallas, Texas 75252 Holdings Corp.
Lee Ta-jen Pacific Electric Wire & Cable Co., Ltd. Director Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Chiao Yu-chi Pacific Electric Wire & Cable Co., Ltd. Director Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Sun Tao-chi Pacific Electric Wire & Cable Co., Ltd. Director Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Lee Ta-cheng Pacific Electric Wire & Cable Co., Ltd. Vice President Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Cheng Chao- Pacific Electric Wire & Cable Co., Ltd. Vice President Taiwan, ROC
chun 4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Sun Tao-heng Pacific Electric Wire & Cable Co., Ltd. Vice President Taiwan, ROC
4th Ft., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Yuan Pei-yu Pacific Electric Wire & Cable Co., Ltd. President Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Systems, Inc.
Section 4
Taipei, Taiwan, Republic of China
H. Baba c/o Pacific Electric Wire & Cable Co., Sumitomo Electric Ind., Japan
4th Fl, 285, Chung Hsiao East Road, Ltd: c/o Pacific Electric
Section 4 Wire & Cable Co., Ltd.
Taipei, Taiwan, Republic of China 4th Fl., 285, Chung Hsiao
East Road, Section 4
Taipei, Taiwan, Republic
of China.
Kuo Chih-Wei United Electronics Industry Co., Ltd. President Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, United Electronics Industry
Section 4 Co., Ltd.
Taipei, Taiwan, Republic of China
Chang-Min- Pacific Electric Wire & Cable Co., Ltd. Chairman Taiwan, ROC
chiang 4th Fl., 285, Chung Hsiao East Road, Greenbay Entertainment
Section 4 Co., Ltd.
Taipei, Taiwan, Republic of China
Tony Yuan Pacific Electric Wire & Cable Co., Ltd. Director Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Tung Hsiu-chun Pacific Electric Wire & Cable Co., Ltd. Director Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Kao Ching-chu Pacific Electric Wire & Cable Co., Ltd. Supervisor Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Chin Yung Pacific Electric Wire & Cable Co., Ltd. Supervisor Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Tung Hsiu-shing Pacific Electric Wire & Cable Co., Ltd. Supervisor Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
</TABLE>
<TABLE>
<CAPTION>
Board of Directors of Consumer
------------------------------
Present Principal
Name Business Address Occupation Citizenship
- --------------- ------------------------------ -------------------- -------------
<S> <C> <C> <C>
Bill C. Bradley c/o Pacific USA Holdings Corp. CEO United States
5999 Summerside Drive #112 Pacific USA Holdings
Dallas, Texas 75252 Corp.
</TABLE>
<TABLE>
<CAPTION>
Executive Officers of Pacific
-----------------------------
Present Principal
Name Business Address Occupation Citizenship
- ---------------- ------------------------------ -------------------------- -------------
<S> <C> <C> <C>
Larry D. Horner c/o Pacific USA Holdings Corp. Chairman of the Board of United States
5999 Summerside Drive, 9112 Pacific USA Holdings
Dallas, Texas 75252 Corp., CEO of PUSA Invest-
Investment Corp. ment Company
Bill C. Bradley c/o Pacific USA Holdings Corp. Chief Executive Officer United States
5999 Summerside Drive, #112 Pacific USA Holdings
Dallas, Texas 75252 Corp.
Michael K. c/o Pacific USA Holdings Corp. Chief Financial Officer United States
McCraw 5999 Summerside Drive, #112 Pacific USA Holdings
Dallas, Texas 75252 Corp.
Cathryn L. c/o Pacific USA Holdings Corp. Chief General Counsel United States
Porter 3200 Southwest Freeway Pacific USA Holdings
Suite 1220 Corp.
Houston, Texas 77027
Kristie A. Lipes c/o Pacific USA Holdings Corp. Chief Administrative United States
5999 Summerside Drive, 9112 Officer
Dallas, Texas 75252 Pacific USA Holdings
Corp.
John Sloan c/o Pacific USA Holdings Corp. Chief Operating United States
5999 Summerside Drive, 9112 Officer
Dallas, Texas 75252 Pacific USA Holdings
Corp.
</TABLE>
<TABLE>
<CAPTION>
Executive Officers of Pacific Electric
--------------------------------------
Present Principal
Name Business Address Occupation Citizenship
- -------------- --------------------------------------- --------------------------- -----------
<S> <C> <C> <C>
Tung Yu-jeh Pacific Electric Wire & Cable Co., Ltd. Chairman Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Sun Tao-tsun Pacific Electric Wire & Cable Co., Ltd. President Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Hu Hung-chiu Pacific Electric Wire & Cable Co., Ltd. Executive Vice President Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, and Chief Financial Officer
Section 4 Pacific Electric Wire &
Taipei, Taiwan, Republic of China Cable Co., Ltd.
Sun Tao-heng Pacific Electric Wire & Cable Co., Ltd. Vice President Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Lee Pon-yean Pacific Electric Wire & Cable Co., Ltd. Vice President Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Lee Ta-cheng Pacific Electric Wire & Cable Co., Ltd. Vice President Taiwan, ROC
4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Cheng Chao- Pacific Electric Wire & Cable Co., Ltd. Vice President Taiwan, ROC
chun 4th Fl., 285, Chung Hsiao East Road, Pacific Electric Wire &
Section 4 Cable Co., Ltd.
Taipei, Taiwan, Republic of China
Tung Ching-yun c/o Pacific USA Holdings Corp Vice President Taiwan, ROC
5999 Summerside Drive, #112 Pacific Electric Wire &
Dallas, Texas 75252 Cable Co., Ltd.,
Vice President
Pacific USA
Holdings Corp.
</TABLE>
<TABLE>
<CAPTION>
Executive Officers of Consumer
------------------------------
Present Principal
Name Business Address Occupation Citizenship
- --------------- ------------------------------ ----------------------- -------------
<S> <C> <C> <C>
Bill C. Bradley c/o Pacific USA Holdings Corp. CEO United States
5999 Summerside Drive #112 Pacific USA Holdings
Dallas, Texas 75252 Corp.
Michael K. c/o Pacific USA Holdings Corp. Chief Financial Officer United States
McCraw 5999 Summerside Drive #112 Pacific USA Holdings
Dallas, Texas 75252 Corp.
</TABLE>
<TABLE>
<CAPTION>
Board of Directors of PSB
-------------------------
Present Principal
Name Business Address Occupation Citizenship
- ---------------- --------------------------------------- --------------------------- -------------
<S> <C> <C> <C>
Tung Yu-jeh Pacific Electric Wire & Cable Co., Ltd. Chairman of the Board Taiwan, ROC
4th Fl, 285, Chung Hsiao E. Rd., Sec. 4 Pacific Southwest Bank
Taipei, Taiwan, ROC Pacific Electric Wire &
Cable Co., Ltd.
Sun Tao-tsun Pacific Electric Wire & Cable Co., Ltd. President Taiwan, ROC
4th Fl, 285, Chung Hsiao E. Rd., Sec. 4 Pacific Electric Wire &
Taipei, Taiwan, ROC Cable Co., Ltd.
Hu Hung-chiu Pacific Electric Wire & Cable Co., Ltd. Executive Vice President Taiwan, ROC
4th Fl, 285, Chung Hsiao E. Rd., Sec. 4 and Chief Financial Officer
Taipei, Taiwan, ROC Pacific Electric Wire &
Cable Co., Ltd.
Lee Pon-yean Pacific Electric Wire & Cable Co., Ltd. Vice President Taiwan, ROC
4th Fl, 285, Chung Hsiao E. Rd., Sec. 4 Pacific Electric Wire &
Taipei, Taiwan, ROC Cable Co., Ltd.
Bill C. Bradley c/o Pacific USA Holdings Corp. CEO United States
5999 Summerside Drive #112 Pacific USA Holdings
Dallas, TX 75252 Corp.
Gerald Hartman c/o Pacific Southwest Bank President/CEO United States
4144 No. Central Expressway Pacific Southwest Bank
Suite 160
Dallas, TX 75204
Larry D. Horner c/o Pacific USA Holdings Corp. Chairman of the Board United States
5999 Summerside Drive #112 Pacific USA Holdings
Dallas, TX 75252 Corp., CEO - PUSA
Investment Company
Lam Chun-hung c/o Southern Methodist University Chairman, Finance United States
PhD. Edwin Cox School of Business Department
6212 Bishop, Crow Bldg., #394
Dallas, TX 75275
J. Ewing Walker, c/o Ward Howell International Consultant United States
Jr. 1000 Louisiana #3150
Houston, TX 77002
William P. c/o Lockhart Motor Company Owner, Automobile United States
Clark, Jr. 303 W. San Antonio Dealership
Lockhart, TX 78644
</TABLE>
<TABLE>
<CAPTION>
Executive Officers of PSB
-------------------------
Present Principal
Name Business Address Occupation Citizenship
- -------------- --------------------------------- ------------------------- -------------
<S> <C> <C> <C>
Gerald Hartman Pacific Southwest Bank President/CEO United States
4144 No. Central Expressway #160 Pacific Southwest Bank
Dallas, TX 75204
Bobby L. Pacific Southwest Bank Executive Vice President United States
Hashaway 4144 No. Central Expressway #160 & Chief Financial Officer
Dallas, TX 75204 Pacific Southwest Bank
William D. Pacific Southwest Bank Executive Vice President United States
Dodge, III 800 No. Shoreline Blvd., #200 So. Pacific Southwest Bank
Corpus Christi, TX 78401
L. Nathan The San Benito Bank & Trust Co. Executive Vice President United States
Winters a Unit of Pacific Southwest Bank Pacific Southwest Bank
221 Van Buren
Harlingen, TX 78550
</TABLE>
<TABLE>
<CAPTION>
Board of Directors of Pacific Financial
---------------------------------------
Present Principal
Name Business Address Occupation Citizenship
- ------------ ---------------------------------------- --------------------------- -----------
<S> <C> <C> <C>
Tung Yu-jeh Pacific Electric Wire & Cable Co., Ltd. Chairman of the Board Taiwan, ROC
4th Fl, 285, Chung Hsiao E. Rod., Sec. 4 Pacific Southwest Bank
Taipei, Taiwan, ROC Pacific Electric Wire &
Cable Co., Ltd.
Sun Tao-tsun Pacific Electric Wire & Cable Co., Ltd. President Taiwan, ROC
4th Fl, 285, Chung Hsiao E. Rod., Sec. 4 Pacific Electric Wire &
Taipei, Taiwan, ROC Cable Co., Ltd.
Hu Hung-chiu Pacific Electric Wire & Cable Co., Ltd. Executive Vice President Taiwan, ROC
4th Fl, 285, Chung Hsiao E. Rod., Sec. 4 and Chief Financial Officer
Taipei, Taiwan, ROC Pacific Electric Wire &
Cable Co.
Lee Pon-yean Pacific Electric Wire & Cable Co., Ltd. Vice President
4th Fl, 285, Chung Hsiao E. Rod., Sec. 4 Pacific Electric Wire &
Taipei, Taiwan, ROC Cable Co.
</TABLE>
<TABLE>
<CAPTION>
Executive Officers of Pacific Financial
---------------------------------------
Present Principal
Name Business Address Occupation Citizenship
- ------------ ---------------------------------------- --------------------------- -----------
<S> <C> <C> <C>
Sun Tao-tsun Pacific Electric Wire & Cable Co., Ltd. President Taiwan, ROC
4th Fl, 285, Chung Hsiao E. Rod., Sec. 4 Pacific Electric Wire &
Taipei, Taiwan, ROC Cable Co., Ltd.
Hu Hung-chiu Pacific Electric Wire & Cable Co., Ltd. Executive Vice President Taiwan, ROC
4th Fl, 285, Chung Hsiao E. Rod., Sec. 4 and Chief Financial Officer
Taipei, Taiwan, ROC Pacific Electric Wire &
Cable Co.
</TABLE>
<TABLE>
<CAPTION>
Board of Directors of First CF
------------------------------
Present Principal
Name Business Address Occupation Citizenship
- -------------- -------------------------------- ------------------------- -------------
<S> <C> <C> <C>
Gerald Hartman Pacific Southwest Bank President/CEO United States
4144 No. Central Expressway #160 Pacific Southwest Bank
Dallas, TX 75204
Bobby L. Pacific Southwest Bank Executive Vice President United States
Hashaway 4144 No. Central Expressway #160 & Chief Financial Officer
Dallas, TX 75204 Pacific Southwest Bank
</TABLE>
<TABLE>
<CAPTION>
Executive Officers of First CF
------------------------------
Present Principal
Name Business Address Occupation Citizenship
- -------- -------------------------------- ------------------------- -------------
<S> <C> <C> <C>
Bobby L. Pacific Southwest Bank Executive Vice President United States
Hashaway 4144 No. Central Expressway #160 & Chief Financial Officer
Dallas, TX 75204 Pacific Southwest Bank
</TABLE>
(d) Criminal Convictions: During the last five years, neither
Reporting Person nor any of the respective executive officers or directors has
been convicted in a criminal proceeding, excluding traffic violations and
similar misdemeanors.
(e) Court or Administrative Proceedings: During the last five years,
neither Reporting Person nor any of the respective executive officers or
directors has been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction as a result of which any of them were or are
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
(f) Citizenship: Pacific is a Texas corporation. Pacific Electric is
incorporated as a Taiwanese limited company. Consumer is a Nevada corporation.
PSB is a federal savings bank located in Texas. Pacific Financial is a Delaware
corporation. First CF is a Texas corporation. The citizenship of each director
and executive officer of Pacific, Pacific Electric and Consumer is set forth in
Item 2(c) of this Statement.
3. Source and Amount of Funds and Other Consideration:
Pursuant to the terms of an Amended and Restated Asset Purchase Agreement,
dated January 8, 1998, by and among Monaco, Pacific, PSB, NAFCO Holding Company
LLC, a Delaware limited liability company and wholly owned subsidiary of Pacific
("NAFCO"), and Advantage Funding Group, Inc., a Delaware corporation and
partially owned subsidiary of Pacific (the "Purchase Agreement"), Pacific sold
to Monaco sub-prime automobile loans having an unpaid principal balance of
$81,115,232.89, consisting of the following loans: (1) Loans with a
$59,211,732.89 principal balance owned by NAFCO and (2) Loans with a
$21,903,500.00 principal balance owned by Advantage. In exchange for the loans,
Monaco paid $77,870,623.60, of which $73,003,709.60 was paid in cash. Monaco
paid the remaining $4,866,914 by issuing to Pacific 2,433,457 shares of Monaco's
8% Cumulative Convertible Preferred Stock, Series 1998-1 valued at $2.00 per
share. Each share of Preferred Stock is convertible at any time into one-half
share of Class A Common Stock, or an aggregate of up to 1,216,728 shares of
Class A Common Stock.
Also, pursuant to the terms of the Purchase Agreement, PSB entered in to a
Loan Loss Reimbursement Agreement whereby PSB agreed to reimburse Monaco for up
to 15% of certain losses incurred by Monaco in connection with the loans
acquired from NAFCO and Advantage. In consideration therefor, Monaco paid PSB
an amount equal to 2% of the principal amount of the acquired loans in the form
of 811,152 shares of Class A Common Stock, valued at $2.00 per share. Such
shares of Class A Common Stock will be held by PSB's wholly owned subsidiary,
First CF.
Also, pursuant to the terms of the Purchase Agreement, Monaco may be
obligated to make additional payments to NAFCO based on the performance of
certain other assets acquired from NAFCO and the results of operations, if any,
with loan originators previously associated with NAFCO. If there are any
pre-tax earnings associated with these assets and/or operations for calendar
years 1998 and 1999, Monaco is obligated to pay NAFCO amounts equal to two and
one-half (2-1/2) times such pre-tax earnings in the form of shares of Monaco's
Class A Common Stock valued at the average daily closing price of such stock on
the Nasdaq Stock Market for the last ten days of such calendar year. The number
of shares of Class A Common Stock which Monaco may be required to issue to NAFCO
pursuant to these agreements cannot be determined at present.
4. Purpose of Transaction.
The purpose of the transaction for which this Statement is being prepared
is to sell the portfolio of sub-prime automobile loans held by Reporting Person.
The Reporting Person currently holds proxies to vote or direct the exercise of a
proxy with respect to an aggregate of 1,273,715 shares of Class B Common Stock
(3 votes per share) and currently owns 2,311,152 shares of Class A Common
Stock. Reporting Person has the ability to vote 51.8% of the total votes of the
Issuer.
Except as described below, Reporting Person has no present plans or
intentions to effect any of the following:
(a) the acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
In addition to the purchase price for the acquired loans, Monaco is
obligated to make certain additional payments to NAFCO based upon the
performance of certain assets it acquired under the Purchase Agreement (the
"Warrants") and the effect of various agreements (collectively, the "Designated
NAFCO Operations") that Monaco may enter into with certain specified loan
originators within the six-month period following January 8, 1998 (the "Closing
Date"). Pursuant to the Purchase Agreement, Monaco will keep separate books and
records in order to determine the performance of the Designated NAFCO Operations
from the closing date through December 31, 1999 to permit the calculation of
NAFCO's share of the profits of such operations. Monaco has also agreed that it
will not divert the business or assets of, or otherwise shift expenses or
earnings to or from, the Designated NAFCO Operations. If there are earnings
from the Designated NAFCO Operations during the calendar years 1998 or 1999
(prior to making any deductions for taxes, amortization of goodwill, interest
expense, overhead and certain other adjustments), Monaco must issue to NAFCO or
NAFCO's designee that number of shares of Monaco's Class A Common Stock equal to
two and one-half (2-1/2) times such "pre-tax" earnings for each calendar year.
It should also be noted that, if for any year there are no "pre-tax" earnings
from the Designated NAFCO Operations, then Monaco has no obligation to issue
stock.
(b) an extraordinary corporate transaction such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of the Issuer or
any of its subsidiaries;
(d) any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or term of the
directors or to fill any existing vacancies of the board:
Reporting Person presently intends to seek a prompt change in
The number of persons constituting the board of directors of Issuer to eight
total members, of which Reporting Person, pursuant to a provision in that
certain Option Agreement dated December 4, 1997, executed by and among
Consumer, Morris Ginsburg, Sandler Family Partners, Ltd., and Irwin L. Sandler
("Option Agreement"), will nominate and appoint four members and will
nominate and appoint Mr. Ginsburg and Mr. Sandler in addition to the four other
persons. The parties contemplate that the remaining two director positions
will be filled by two persons independent of Issuer and Reporting Person.
Such persons have not yet been identified. Reporting Person shall retain
Morris Ginsburg as Issuer's Chairman of the Board and Irwin Sandler as
Issuer's Executive Vice President, but may elect a new chief executive officer
at some point in the future, although no person has yet been identified to
assume such position and no specific timetable has been set for any such change.
(e) any material change in the present capitalization or dividend
policy of the Issuer;
(f) any other material change in the Issuer's business or corporate
structure;
(g) changes in the Issuer's charter, by-laws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Issuer by any person:
Monaco's shareholders have approved an amendment to Monaco's Articles
of Incorporation to (i) increase the number of authorized shares of Class A
Common Stock from 17,750,000 shares to 30,000,000 shares, and (ii) increase the
number of authorized shares of preferred stock from 5,000,000 shares to
10,000,000 shares, having such preferences, limitations and relative rights as
may be determined by Monaco's board of directors. Monaco's shareholders
approved such amendment on March 4, 1998 at Monaco's annual shareholder's
meeting.
(h) causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) a class of eligible equity securities of the issuer becoming
eligible for termination of registration pursuant to Section 12(g)(4) of the
Act; or
(j) any action similar to those enumerated above.
5. Interest in Securities of the Issuer.
(a) Reporting Person has beneficial ownership of 2,311,152 shares of
Monaco Class A Common Stock, 1,273,715 shares of Class B Common Stock, and
2,433,457 shares of the Preferred Stock. The percentage of Monaco Class A
Common Stock beneficially owned by Reporting Person is 28.8%. The percentage of
Monaco Class B Common Stock beneficially owned by Reporting Person is 100%. The
percentage of Preferred Stock beneficially owned by Reporting Person is 100%.
The percentage of Issuer's total voting power controlled by Reporting Person is
51.8%.
(b) Reporting Person has full voting power with respect to the shares
of the Class A Common Stock beneficially owned by it and has shared dispositive
power with respect to the shares of Monaco Class A Common Stock beneficially
owned by it. Reporting Person has full voting power with respect to the 830,000
Class B Common Stock as a result of the Option Agreement and has the right,
pursuant to the Option Agreement, to direct the exercise of all consensual or
other voting rights with respect to 443,715 additional shares of Issuer's Class
B Common Stock to which Pacific holds a proxy. The Preferred Stock held by
Reporting Person does not have any voting rights prior to conversion.
(c) Except as described above, neither Reporting Person nor any person
named in Section 2(c) hereto owns beneficially any shares of Common Stock of
Monaco or has effected any transaction in shares of Common Stock of Monaco
during the sixty (60) days preceding the date of this Statement.
(d) No person other than Reporting Person is known to Reporting Person
to have the right to receive or the power to direct the receipt of dividends
from, or the proceeds from the sale of, the shares of Monaco Class A Common
Stock beneficially owned by them; except that, during the term of the Option
Agreement, and prior to any exercise of the option or put contemplated therein,
the holders of the Class B Common Stock which are the subject of such Agreement
are entitled to retain any dividends received on such shares.
(e) Not applicable.
6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
Other than as indicated elsewhere in this Statement, to the best knowledge
of Reporting Person, neither Reporting Person nor any of the persons named in
Section 2(c) hereto is a party to any contract, arrangement, understanding, or
relationship (legal or otherwise) with any person with respect to any securities
of the Issuer, including but not limited to, the transfer or voting of any of
the Issuer's securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies, except as follows:
See Item 3.
7. Material to be Filed as Exhibits.
Exhibit 10.01: Amended and Restated Asset Purchase Agreement
Exhibit 10.02: Loan Loss Reimbursement Agreement
Exhibit 99.03: Joint Filing Agreement
<PAGE>
Signatures
After reasonable inquiry and to the best of each of the undersigned's knowledge
and belief, the undersigned certify that the information set forth in this
statement is true, complete and correct.
Date: March 13, 1998 Pacific USA Holdings Corp.
By: /s/ Bill C. Bradley
----------------------------
Bill C. Bradley
Chief Executive Officer
Pacific Electric Wire & Cable Co., Ltd.
By: /s/ Tung Ching-yun
--------------------------
Tung Ching-yun
Vice President
Consumer Finance Holdings, Inc.
By: /s/ Bill C, Bradley
----------------------------
Bill C. Bradley
Chief Executive Officer
Pacific Southwest Bank
By: /s/ Gerald Hartman
--------------------------
Gerald Hartman
Chief Executive Officer
Pacific Financial Group, Inc.
By: /s/ Sun Tao-tsun
------------------------
Sun Tao-tsun
Chief Executive Officer
First CF Corporation
By: /s/ Bobby Hashaway
--------------------------
Bobby Hashaway
Chief Executive Officer
<PAGE>
EXHIBIT 10.01
AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
This AMENDED AND RESTATED ASSET PURCHASE AGREEMENT (this "Agreement"),
dated as of January 8, 1998, is entered into among Monaco Finance, Inc., a
Colorado corporation ("Monaco"), Pacific USA Holdings Corp., a Texas
corporation ("Pacific USA"), Pacific Southwest Bank, a federally chartered
savings bank ("PSB"), NAFCO Holding Company, LLC, a Delaware limited liability
company ("NAFCO"), Advantage Funding Group, Inc., a Delaware corporation
("Advantage"), and PCF Service, LLC, a Delaware limited liability company
("PCF").
WHEREAS Monaco, Pacific USA, NAFCO, and Advantage have previously entered
into that certain Asset Purchase Agreement, dated as of September 30, 1997 (as
amended or modified to the date hereof, the "Original Agreement");
WHEREAS the parties to the Original Agreement desire to amend and restate
the Original Agreement in its entirety on the terms and conditions contained
herein; and
WHEREAS, in connection with such amendment and restatement, the parties
to the Original Agreement desire to have PSB and PCF become parties to this
Agreement, and each of PSB and PCF desires to become a party to this
Agreement, on the terms and conditions contained herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere in
this Agreement, the following terms, when used herein, will have the following
meanings:
"Acquired Loans" means the NAFCO Loans and the Advantage Loans.
"ADA Capital Corporation" means ADA Capital Corporation, a New York
corporation.
"ADA Equity Interest" means one hundred percent (100%) of the equity
interests owned by PCF in ADA Capital Corporation.
"Advantage Loan Purchase Agreement" means a loan purchase agreement,
substantially in the form of EXHIBIT A-1 attached hereto, relating to the
Advantage Loans among Monaco, Pacific USA, PSB, and Advantage.
"Advantage Preferred Shares" means the shares of Preferred Stock that may
be issued to Advantage (or its designee) pursuant to Section 2.2(b)(ii)(B).
"Adverse Claim" means a claim of ownership or any lien, security
interest, title retention, trust or other charge or encumbrance, or other type
of preferential arrangement having the effect of a lien or security interest
upon or with respect to any of the properties of a transferring party other
than in favor of Monaco.
"Asset Purchase Documents" means all agreements, documents, and
instruments entered into by any of the parties hereto in connection with the
transactions contemplated hereby.
"Auto Loan" means a consumer Automobile loan, including installment sales
contracts, arising from the sale of Automobiles.
"Auto Loan Balance" means, at any time any determination thereof is to be
made: (a) the aggregate outstanding principal balance of the Acquired Loans
as of the close of business on the Cut-Off Date, determined after deduction of
all payments of principal received with respect to the Acquired Loans on or
before the close of business on the Cut-Off Date; minus (b) the principal
balance (as of the Cut-Off Date) of any Acquired Loans that have been
repurchased pursuant to the terms of either of the Loan Purchase Agreements.
"Automobiles" means new and used automobiles and light trucks (i.e.,
light duty trucks with a maximum load capacity of 2,000 pounds), the purchase
of which the related Obligors financed by Auto Loans.
"Business Day" means any day, other than a Saturday or a Sunday, or
another day on which commercial banks in the States of New York, Colorado, or
Texas are required, or authorized by law, to close.
"Certificate of Designation" means a certificate of designation of Monaco
respecting the rights, preferences, privileges, and restrictions pertaining to
the Preferred Stock, such certificate of designation to be in the form of
EXHIBIT C-1 attached hereto.
"Class A Common Stock" means the Class A Common Stock of Monaco, par
value $.01 per share.
"Commission" means the Securities and Exchange Commission.
"Cut-Off Date" means December 19, 1997.
"Designated NAFCO Operations" means the operations represented by (a) any
loan sale agreements that are executed by Monaco during the period beginning
on the Closing Date and ending six (6) months following the Closing Date with
the prospects who are listed on SCHEDULE A, (b) any loan sale agreements
that are executed by Monaco or, if and only if the ADA Equity Interest is
assigned to Monaco pursuant to the terms hereof, ADA Capital Corporation
during the period beginning on the execution of this Agreement and ending six
(6) months following the Closing Date with NADA associations, including those
who are listed in SCHEDULE B, and (c) the Unrestricted Warrants.
"Determination Date" means: (a) if Monaco receives the Monaco
Shareholders' Approval and the parties hereto receive the HSR Approval, the
date which is the later to occur of: (i) the HSR Date; and (ii) the Monaco
Shareholders' Approval Date; (b) if Monaco receives the Monaco Shareholders'
Approval but the parties hereto receive the HSR Denial, the date which is the
later to occur of: (i) the HSR Date; and (ii) the Monaco Shareholders'
Approval Date; or (c) if Monaco does not receive the Monaco Shareholders'
Approval, the Monaco Shareholders' Approval Date.
"Exchange Act" means the Securities and Exchange Act of 1934, and the
rules and regulations promulgated thereunder, as amended.
"Federal Funds Rate" means, for any day, the rate, per annum (rounded
upwards, if necessary, to the nearest 0.01%), equal to the weighted average of
the rates of overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers on such day as published by
the Federal Reserve Bank of New York on the Business Day immediately following
such day; provided that, if the day for which such rate is to be determined
is not a Business Day, then the "Federal Funds Rate" for such day shall be
such rate on such transactions on the immediately following Business Day as
published on the Business Day immediately following such Business Day.
"HSR Approval" means either: (a) the express written approval by the
United States Department of Justice and Federal Trade Commission of the
transactions referred to in the HSR Required Filings; or (b) the expiration of
all waiting periods respecting the HSR Required Filings without objection by
the United States Department of Justice and/or the Federal Trade Commission.
"HSR Date" means the first Business Day following the date on which the
parties hereto have received either the HSR Approval or the HSR Denial.
"HSR Denial" means the final express denial by the United States
Department of Justice and/or the Federal Trade Commission of the transactions
referred to in the HSR Required Filings.
"HSR Required Filings" means all filings required to be made by the
parties hereto (or any of them) under the Hart-Scott-Rodino Act with respect
to the Stock Issuances.
"Interest Rate" means, for any date, the rate, per annum, equal to the
Federal Funds Rate plus 2.21%.
Loan Loss Reimbursement Agreement" means a Loan Loss Reimbursement
Agreement executed by PSB, NAFCO, and Advantage in favor of Monaco (or its
designee) in the form attached hereto as EXHIBIT L-1, together with all
exhibits and schedules thereto.
"Loan Purchase Agreements" means, collectively, the NAFCO Loan Purchase
Agreement and the Advantage Loan Purchase Agreement.
"Monaco/Advantage Note" means a promissory note, substantially in the
form of EXHIBIT M-1 attached hereto, evidencing the obligation of Monaco to
pay to Advantage (to the extent required by, and in accordance with, Section
2.2(b)(ii)) the balance of the purchase price for the Advantage Loans.
"Monaco/Advantage Registration Rights Agreement" means a registration
rights agreement, substantially in the form of EXHIBIT M-2 attached hereto,
between Monaco and Advantage (or its designee).
"Monaco/ANO Note I" means a promissory note, substantially in the form of
EXHIBIT M-1 attached hereto, evidencing the obligation of Monaco to pay to
NAFCO or its designee (to the extent required by, and in accordance with,
Section 2.2(c)(ii)) an amount equal to two and one-half (2 ) times the
Pre-Tax Earnings for such calendar year.
"Monaco/ANO Note II" means a promissory note, substantially in the form
of EXHIBIT M-1 attached hereto, evidencing the obligation of Monaco to pay
to NAFCO or its designee (to the extent required by, and in accordance with,
Section 2.2(c)(ii)) an amount equal to two and one-half (2 ) times the
Pre-Tax Earnings for such calendar year.
"Monaco/NAFCO Note" means a promissory note, substantially in the form of
EXHIBIT M-1 attached hereto, evidencing the obligation of Monaco to pay to
NAFCO or its designee (to the extent required by, and in accordance with,
Section 2.2(a)(ii)) the balance of the purchase price for the NAFCO Loans.
"Monaco/NAFCO Registration Rights Agreement" means a registration rights
agreement, substantially in the form of EXHIBIT M-3 attached hereto, between
Monaco and NAFCO (or its designee).
"Monaco Pledge Agreement" means a pledge agreement, substantially in the
form of EXHIBIT M-4 attached hereto, between Monaco, as pledgor, and PSB,
NAFCO, and Advantage (or their respective designees), as secured parties.
"Monaco/PSB Note" means a promissory note, substantially in the form of
EXHIBIT M-1 attached hereto, evidencing the obligation of Monaco to pay to
PSB or its designee (to the extent required by, and in accordance with,
Section 2.3), an amount equal to two percent (2%) of the Auto Loan Balance
as of the Cut-Off Date.
"Monaco/PSB Registration Rights Agreement" means a registration rights
agreement, substantially in the form of EXHIBIT M-5 attached hereto, between
Monaco and PSB (or its designee).
"Monaco Shareholders' Approval" means the approval by the shareholders of
Monaco of the Stock Issuances.
"Monaco Shareholders' Approval Date" means the day which is the first
Business Day immediately following the date on which the meeting of the
shareholders of Monaco takes place at which Monaco either receives or fails to
receive the Monaco Shareholders' Approval.
"NAFCO Common Shares" means the shares of Class A Common Stock that may
be issued to NAFCO (or its designee) pursuant to Sections 2.2(c)(ii) and
2.2(c)(iii).
"NAFCO Loan Purchase Agreement" means a loan purchase agreement,
substantially in the form of EXHIBIT N-1 attached hereto, relating to the
NAFCO Loans among Monaco, Pacific USA, PSB, and NAFCO.
"NAFCO Loan Originators" means any originator who is party to a loan sale
agreement described in clause (a) or (b) of the definition of "Designated
NAFCO Operations" herein.
"NAFCO Preferred Shares" means the shares of Preferred Stock that may be
issued to NAFCO (or its designee) pursuant to Section 2.2(a)(ii)(A).
"NAFCO Shares" means, collectively, the NAFCO Common Shares and the NAFCO
Preferred Shares.
"NASDAQ" means the Nasdaq National Market System.
"Obligor" means, with respect to any Auto Loan, the Person primarily
obligated to make payments in respect thereto.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, limited liability company, trust,
association, joint venture, governmental authority or any other entity of
whatever nature.
"Post-Closing Loans" means Auto Loans purchased by Monaco or its
affiliates from NAFCO Loan Originators subsequent to the Closing Date.
"Preferred Stock" means non-voting, no par value 8% Cumulative
Convertible Preferred Stock, Series 1997-1 of Monaco, having the rights,
preferences, privileges, and restrictions set forth in the Certificate of
Designation.
"Pre-Tax Earnings" means for any calendar year during the Pricing Period,
the aggregate of the net income of the Designated NAFCO Operations determined
in accordance with generally accepted accounting principles and based on
audited financial statements of Monaco, except that solely for purposes of
calculation of such amount, (a) there shall be excluded any gain or loss
constituting federal or state income taxes; (b) no deduction will be made for
amortization of goodwill; (c) no deduction will be made for interest on funds
advanced by Monaco for the Designated NAFCO Operations; (d) no deduction shall
be made for corporate assessments, overhead or charges by Monaco or any of its
affiliates, except for loan origination costs and servicing costs as more
fully set out below; (e) revenue shall include interest and fee income on
Post-Closing Loans, less any losses of principal as a result of defaulted
contracts, net of recoveries thereof, in excess of the loan loss reserve for
such loans, gain on sale attributable to securitizations of Post-Closing
Loans, subject to adjustment, if any, for future loss on the Post-Closing
Loans; (f) only if Monaco has effected an off-balance sheet securitization of
at least $30 million in principal amount of automobile loans primarily
consisting of automobile loans acquired in the ordinary course of its business
(i.e., automobile loans that were not acquired by Monaco in bulk loan purchase
transactions involving the purchase of multiple automobile loans in a single
transaction) there shall be included as net income an amount equal to the
product of the principal balance of any Post-Closing Loans which have not been
securitized as of December 31, 1999 multiplied by the pre-tax gain on sale on
Monaco's most recent securitization transaction (expressed as a percentage of
the principal balance of the automobile loans included in such
securitization), and excess servicing income, if any, relating to the
Post-Closing Loans, (g) direct expenses related to each revenue stream
referred to in (e) and (f) of this sentence will be deducted from gross
revenue to determine the earnings contribution of each revenue stream, such
direct expenses to consist of interest incurred by Monaco to acquire and
warehouse such loans, a one time application fee of $20 for each Post-Closing
Loan of the Designated NAFCO Operations; a one time loan boarding fee of $200
for credit, underwriting, and funding; and a monthly fee of 250 basis points
per annum on the average loans outstanding for servicing collection operations
for each Post-Closing Loan serviced by Monaco. Computations of gains-on-sales
with respect to securitizations shall be computed by Monaco and certified by
its outside auditors.
"Pricing Period" means the period of January 1, 1998 through December 31,
1999.
"PSB Shares" means the shares of Class A Common Stock that may be issued
to PSB or its designee pursuant to Section 2.3.
"Related Party" means any of Pacific USA, PSB, NAFCO, Advantage, and/or
PCF.
"Reimbursement Value" means an amount equivalent to two percent (2%)of
the Auto Loan Balance as of the Cut-Off Date. For example, if the Auto Loan
Balance on the Cut-Off Date is $100 million, the Reimbursement Value is 2% x
$100 million, or $2 million.
"Restricted Warrants" means those Warrants with respect to which there
exist restrictions on transfer to a third Person (including Monaco) that have
not been waived or rendered ineffective or inapplicable (by operation of law
or otherwise) in connection with the transfer of such Warrants to Monaco as
contemplated hereby, all of which, as of the Closing Date, are scheduled on
SCHEDULE R-1 attached hereto, which SCHEDULE R-1 also sets forth all
restrictions on the transfer of same.
"Securities Act" means the Securities Act of 1933, and the rules and
regulations promulgated thereunder, as amended.
"Stock Issuances" means the issuance by Monaco of all of the Transaction
Shares at the respective times contemplated by the terms of this Agreement.
"Transaction" means, collectively, all of the transactions contemplated
hereby.
"Transaction Shares" means, collectively, the Advantage Preferred Shares,
the NAFCO Shares, and the PSB Shares.
"Unrestricted Warrants" means all Warrants, other than Restricted
Warrants, that have been sold, assigned, transferred and conveyed to Monaco as
contemplated hereby, all of which, as of the Closing Date, are scheduled on
SCHEDULE U-1 attached hereto.
"Warrants" means, collectively, the stock and/or warrants held by NAFCO
or PCF in NAFCO Loan Originators, including the ADA Equity Interest.
ARTICLE 2 ARTICLE
PURCHASE AND SALE OF THE ASSETS PURCHASE AND SALE OF THE ASSETS
2.1 Sale and Purchase of Assets.
(a) NAFCO Loans. Subject to the terms and conditions of this
Agreement and the NAFCO Loan Purchase Agreement, NAFCO hereby agrees to sell,
convey, assign, transfer and deliver to Monaco on the Closing Date, and Monaco
hereby agrees to acquire, buy and accept, all of NAFCO's rights, title and
interest in and to all of the Auto Loans set forth on SCHEDULE 2.1(A)
attached hereto, which Auto Loans: (i) as of the Cut-Off Date, are not more
than fifty-nine (59) days past due with respect to any regularly scheduled
monthly payment from any Obligor thereon; and (ii) shall be listed on the
"Auto Loan Schedule" attached to the NAFCO Loan Purchase Agreement (such Auto
Loans are collectively referred to herein as the "NAFCO Loans").
(b) Advantage Loans. Subject to the terms and conditions of this
Agreement and the Advantage Loan Purchase Agreement, Advantage hereby agrees
to sell, convey, assign, transfer, and deliver to Monaco, and Monaco hereby
agrees to acquire, buy and accept, all of Advantage's rights, title, and
interest in and to the Auto Loans set forth on SCHEDULE 2.1(B) attached
hereto, which Auto Loans: (i) as of the Cut-Off Date, are not more than
fifty-nine (59) days past due with respect to any regularly scheduled monthly
payment from any Obligor thereon; and (ii) shall be listed on the "Auto Loan
Schedule" attached to the Advantage Loan Purchase Agreement (such Auto Loans
are collectively referred to herein as the "Advantage Loans").
(c) Warrants. Subject to the terms and conditions of this
Agreement, PCF hereby agrees to sell, convey, assign, transfer and deliver to
Monaco on the Closing Date, and Monaco hereby agrees to acquire, buy and
accept, all of PCF's rights, title and interest in and to all of the Warrants;
provided that, if, as of the Closing Date, there exist any Restricted
Warrants, each of NAFCO and PCF shall, from and after the Closing Date, use
its best efforts to cause the transfer of such Restricted Warrants to Monaco
in compliance with the applicable restrictions; provided further that PCF
shall not be deemed to have sold or transferred any Restricted Warrant(s)
until such time, if any, as such Restricted Warrant(s) become(s) Unrestricted
Warrant(s).
2.2 Purchase Price. Subject to the terms and conditions of this
Agreement and the Loan Purchase Agreements:
(a) NAFCO Loans. The purchase price payable by Monaco to NAFCO for
the NAFCO Loans shall be 96% of the outstanding principal balance of the NAFCO
Loans as of the Cut-Off Date, plus accrued and unpaid interest on each NAFCO
Loan through the Cut-Off Date, plus interest as provided in Section
2.2(a)(i), payable as follows:
(i) an amount equal to (A) 90% of the outstanding principal balance
of the NAFCO Loans as of the Cut-Off Date, plus (B) accrued and unpaid
interest on each NAFCO Loan through the Cut-Off Date, plus (C) interest on the
foregoing amounts from the Cut-Off Date to the Closing Date at the Interest
Rate, shall be payable in cash on the Closing Date; and
(ii) the balance of the purchase price for the NAFCO Loans shall be
payable by the issuance by Monaco to NAFCO (or its designee) on the
Determination Date of: (A) if Monaco does not receive the Monaco
Shareholders' Approval or the parties hereto receive the HSR Denial, the
Monaco/NAFCO Note; or (B) if Monaco receives the Monaco Shareholders' Approval
and the parties hereto receive the HSR Approval, that number of shares of
fully paid and non-assessable Preferred Stock equal to 6% of the outstanding
principal balance of the NAFCO Loans as of the Cut-Off Date, divided by $2.00.
(b) Advantage Loans. The purchase price payable by Monaco to
Advantage for the Advantage Loans shall be 96% of the outstanding principal
balance of the Advantage Loans as of the Cut-Off Date, plus accrued and unpaid
interest on each Advantage Loan through the Cut-Off Date, plus interest as
provided in Section 2.2(b)(i), payable as follows:
(i) an amount equal to (A) 90% of the outstanding principal balance
of the Advantage Loans as of the Cut-Off Date, plus (B) accrued and unpaid
interest on each Advantage Loan through the Cut-Off Date, plus (C) interest on
the foregoing amounts from the Cut-Off Date to the Closing Date at the
Interest Rate, shall be payable in cash on the Closing Date; and
(ii) the balance of the purchase price for the Advantage Loans shall
be payable by the issuance by Monaco to Advantage (or its designee) on the
Determination Date of: (A) if Monaco does not receive the Monaco
Shareholders' Approval or the parties hereto receive the HSR Denial, the
Monaco/Advantage Note; or (B) if Monaco receives the Monaco Shareholders'
Approval and the parties hereto receive the HSR Approval, that number of
shares of fully paid and non-assessable Preferred Stock equal to 6% of the
outstanding principal balance of the Advantage Loans as of the Cut-Off Date,
divided by $2.00.
(c) Additional Payments in Respect of Designated NAFCO Operations.
(i) For the period commencing on the Closing Date and ending December
31, 1999, Monaco will maintain a separate book of accounts for the Designated
NAFCO Operations to determine the Pre-Tax Earnings of the Designated NAFCO
Operations during each calendar year of the Pricing Period.
(ii) If (y) any Warrants have been transferred to Monaco pursuant to
Section 2.1(c) and/or any loan sale agreements referred to in clauses (a) and
(b) of the definition of "Designated NAFCO Operations" contained herein have
been entered into between the Closing Date and the date which is six months
thereafter and (z) there are any Pre-Tax Earnings from the Designated NAFCO
Operations for the 1998 calendar year, Monaco will issue to NAFCO or its
designee, on or before April 15, 1999: (A) if Monaco shall have received the
Monaco Shareholders' Approval and the parties hereto shall have received the
HSR Approval, that number of shares of Class A Common Stock equal to (1) two
and one/half (2 ) times the Pre-Tax Earnings for such calendar year, divided
by (2) the average of the daily closing sales price (or the last reported
closing sales price if on any trading day there shall have been no
transactions in such stock) per share of the Class A Common Stock listed on
the NASDAQ on the ten trading days immediately preceding January 1, 1999; or
(B) if Monaco shall not have received the Monaco Shareholders' Approval or the
parties hereto shall have received the HSR Denial, the Monaco/ANO Note I.
(iii) If (y) any Warrants have been transferred to Monaco pursuant to
Section 2.1(c) and/or any loan sale agreements referred to in clauses (a) and
(b) of the definition of "Designated NAFCO Operations" contained herein have
been entered into between the Closing Date and the date which is six months
thereafter and (z) there are any Pre-Tax Earnings from the Designated NAFCO
Operations for the 1999 calendar year, Monaco will issue to NAFCO or its
designee, on or before April 15, 2000: (A) if Monaco shall have received the
Monaco Shareholders' Approval and the parties hereto shall have received the
HSR Approval, that number of shares of Class A Common Stock equal to (x) two
and one/half (2 ) times the Pre-Tax Earnings for such calendar year, divided
by (y) the average of the daily closing sales price (or the last reported
closing sales price if on any trading day there shall have been no
transactions in such stock) per share of the Class A Common Stock listed on
the NASDAQ on the ten trading days immediately preceding January 1, 2000; or
(B) if Monaco shall not have received the Monaco Shareholders' Approval or the
parties hereto shall have received the HSR Denial, the Monaco/ANO Note II.
2.3 Loan Loss Reimbursement. PSB, a wholly owned subsidiary of
Pacific USA, NAFCO, and Advantage shall execute the Loan Loss Reimbursement
Agreement in favor of Monaco on the Closing Date. As consideration for such
Loan Loss Reimbursement Agreement, on the Determination Date: (a) if Monaco
shall have received the Monaco Shareholders' Approval and the parties hereto
shall have received the HSR Approval, then Monaco shall issue to and in the
name of PSB or its designee one share of Class A Common Stock for each $2.00
of Reimbursement Value; or (b) if Monaco shall not have received the Monaco
Shareholders' Approval or the parties hereto shall have received the HSR
Denial, then Monaco shall issue to PSB or its designee the Monaco/PSB Note.
ARTICLE 3
CLOSING
3.1 Time, Date and Place of Closing. The closing of the
Transaction (other than that portion of the Transaction consisting of the
Stock Issuances) and the deliveries required by Sections 3.5 through 3.9
(collectively, the "Closing"), shall be made at the offices of Andrews & Kurth
L.L.P., 1717 Main Street, Suite 3700, Dallas, Texas 75201, at 10:00 a.m.
(Texas time), on January 8, 1998, or at such other place and time as the
parties hereto shall mutually agree (the "Closing Date").
3.2 Closing; Failed Closing.
(a) The Closing shall be subject to the satisfaction of all of the
conditions set forth in this Article III (to the extent not waived in
accordance with Section 7.5). The Closing shall not be deemed to have
occurred unless and until all of the conditions contained in this Article III
have been satisfied (or waived in accordance with Section 7.5).
(b) If the Closing does not occur for any reason on or before January
10, 1998, then the parties shall have no further obligations or liabilities to
each other under this Agreement or any of the other agreements, documents, or
instruments executed in connection herewith.
3.3 Conditions Relating to Pacific USA, PSB, NAFCO, Advantage, and
PCF. Consummation by each of Pacific USA, PSB, NAFCO, Advantage, and PCF of
the Transaction is subject to the fulfillment on or before the Closing Date of
each of the following conditions, any one or more of which may be waived in
whole or in part in accordance with Section 7.5 (and, at or prior to the
Closing, any of such parties may obtain a certificate of the President of
Monaco or such other evidence as it deems advisable as to the fulfillment of
the conditions in subparagraphs (a) through (c) below to the extent such
conditions relate to Monaco):
(a) The representations and warranties of Monaco con-tained in this
Agreement or in any certificate, schedule, exhibit or other agreement
delivered pursuant to the provisions of this Agreement shall be true in all
material respects as of the date when made
(b) Monaco shall have performed and complied in all material respects
with all covenants, agree-ments and conditions required by this Agreement to
be performed or complied with by it on or before the Closing Date.
(c) On the Closing Date there shall be no judgment, decree,
injunction, ruling or order of any court or governmental authority outstanding
against Monaco, Pacific USA, PSB, NAFCO, Advantage, or PCF which prohibits,
restricts or delays consumma-tion of the Transaction.
(d) Pacific USA and NAFCO shall have terminated any employment
contracts relating to NAFCO employees that have not been assumed by Monaco, on
terms satisfactory to Pacific USA and NAFCO.
(e) Monaco shall have obtained a commitment for financing of the
purchase of the Acquired Loans, in form and content acceptable to Pacific USA,
NAFCO and Advantage.
(f) NAFCO shall have received the consent of its members to the
Transaction.
3.4 Conditions Relating to Monaco. Consummation by Monaco of the
Transaction is subject to the fulfillment on or prior to the Closing Date of
each of the following conditions, any one or more of which may be waived in
whole or in part by Monaco in accordance with Section 7.5 (and, at or prior
to the Closing, Monaco may obtain a certificate of the President of Pacific
USA, PSB, NAFCO, Advantage, or PCF, as the case may be, or such other evidence
as it deems advisable as to the fulfillment of the following conditions):
(a) The representations and warranties of Pacific USA, PSB, NAFCO,
Advantage, and PCF contained in this Agreement or in any certificate,
schedule, exhibit or other agreement delivered pursuant to one or more of the
provisions of this Agreement, shall be true in all material respects as of the
date when made.
(b) Pacific USA, PSB, NAFCO, Advantage, and PCF shall have per-formed
and complied in all material respects with all covenants, agreements and
conditions required by this Agreement to be performed or complied with by them
on or prior to the Closing Date.
(c) On the Closing Date there shall be no judgment, decree,
injunction, ruling or order of any court or governmental authority outstanding
against Monaco, Pacific USA, PSB, NAFCO, Advantage, and/or PCF which
prohibits, restricts or delays consumma-tion of the Transaction.
(d) Monaco shall have obtained a commitment for financing of the
purchase of the Acquired Loans, in form and content acceptable to Monaco.
(e) Monaco shall have completed its due diligence and shall be
satisfied with the results of its due diligence.
(f) As of the Cut-Off Date, no more than twelve percent (12%) of the
aggregate number of Acquired Loans will be between thirty-one (31) and
fifty-nine (59) days past due with respect to any regularly scheduled monthly
payment from the related Obligors.
3.5 Deliveries by Monaco. Monaco hereby covenants and agrees to
deliver or cause to be delivered the following on or before the Closing Date,
and it shall be a condition to the obligations of Pacific USA, PSB, NAFCO,
Advantage and PCF under this Agree-ment that all of the following are
delivered on or before the Closing Date:
(a) The NAFCO Loan Purchase Agreement.
(b) The Advantage Loan Purchase Agreement.
(c) A Servicing Agreement (substantially in the form of EXHIBIT
3.5(C) attached hereto, the "Advantage Servicing Agreement") between Monaco
and Advantage, as servicer, pursuant to which Advantage will service the
Advantage Loans on an interim basis from the Closing Date through June 30,
1998, at which time Monaco shall assume overall servicing responsibilities.
(d) A Servicing Agreement (substantially in the form of EXHIBIT
3.5(D) attached hereto, the "NAFCO Servicing Agreement") between Monaco and
NAFCO, as servicer, pursuant to which NAFCO will service the NAFCO Loans on an
interim basis, from the Closing Date through June 30, 1998, at which time
Monaco shall assume overall servicing responsibilities.
(e) The Monaco Pledge Agreement.
(f) The Loan Loss Reimbursement Agreement.
(g) A certificate of the Secretary or an Assistant Secretary of
Monaco certifying as to (i) the actions referred to in Section 4.1(b), (ii)
a true and correct copy of the Certificate of Incorporation of Monaco, (iii) a
good standing certificate with respect to Monaco, dated as of a recent date,
and (iv) the authorization and incumbency of the officers of Monaco that
executed this Agreement and the other agreements, instruments and certificates
to be delivered by Monaco pursuant to this Agreement.
(h) The opinion of counsel for Monaco, in the form agreed to between
Monaco's counsel, Pacific USA, PSB, NAFCO, Advantage, and PCF.
3.6 Deliveries by NAFCO. NAFCO hereby covenants and agrees to
deliver or cause to be delivered the following on or before the Closing Date,
subject to the other terms and conditions of this Agreement, and it shall be a
condition to Monaco's obligations under this Agreement that all of the
following are delivered on or before the Closing Date:
(a) The NAFCO Loan Purchase Agreement.
(b) The NAFCO Servicing Agreement.
(c) The Loan Loss Reimbursement Agreement and the "Letters of Credit"
(as that term is defined in the Loan Loss Reimbursement Agreement).
(d) The Monaco Pledge Agreement.
(e) A certificate of the Secretary or an Assistant Secretary of NAFCO
certifying as to (i) the actions referred to in Section 4.3(b), (ii) a true
and correct copy of the Certificate of Formation of NAFCO, and (iii) the
authorization and incumbency of the officers of NAFCO that executed this
Agreement and the other agreements, instruments and certificates to be
delivered by NAFCO pursuant to this Agreement.
(f) A good standing certificate with respect to NAFCO, dated as of a
recent date.
(g) The opinion of counsel for NAFCO, in the form agreed to between
Monaco and NAFCO.
3.7 Deliveries by Advantage. Advantage hereby covenants and agrees
to deliver or cause to be delivered the following on or before the Closing
Date, subject to the other terms and conditions of this Agreement, and it
shall be a condition to Monaco's obligations under this Agreement that all of
the following are delivered on or before the Closing Date:
(a) The Advantage Loan Purchase Agreement.
(b) The Advantage Servicing Agreement.
(c) The Loan Loss Reimbursement Agreement and the "Letters of Credit"
(as that term is defined in the Loan Loss Reimbursement Agreement).
(d) The Monaco Pledge Agreement.
(e) The certificate of the Secretary or an Assistant Secretary of
Advantage certifying as to (i) the actions referred to in Section 4.4(b),
(ii) a true and correct copy of the Certificate of Incorporation of Advantage,
and (iii) the authorization and incumbency of the officers of Advantage that
executed this Agreement and the other agreements, instruments and certificates
to be delivered by Advantage pursuant to this Agreement.
(f) A good standing certificate with respect to Advantage, dated as
of a recent date.
(g) The opinion of counsel for Advantage, in the form agreed to
between Advantage's counsel and Monaco.
3.8 Deliveries by Pacific USA. Pacific USA hereby covenants and
agrees to deliver or cause to be delivered the following on or before the
Closing Date, subject to the other terms and conditions of this Agreement, and
it shall be a condition to Monaco's obligations under this Agreement that all
of the following are delivered on or before the Closing Date:
(a) The Loan Purchase Agreements.
(b) A certificate of the Secretary or an Assistant Secretary of
Pacific USA certifying as to (i) the actions referred to in Section 4.2(b),
(ii) a true and correct copy of the Certificate of Incorporation of Pacific
USA, and (iii) the authorization and incumbency of the officers of Pacific USA
that executed this Agreement and the other agreements, instruments and
certificates to be delivered by Pacific USA pursuant to this Agreement.
(c) A good standing certificate with respect to Pacific USA, dated as
of a recent date.
(d) The opinion of counsel for Pacific USA, in the form agreed to
between Pacific USA's counsel and Monaco.
3.9 Deliveries by PSB. PSB hereby covenants and agrees to deliver
or cause to be delivered the following on or before the Closing Date, subject
to the other terms and conditions of this Agreement, and it shall be a
condition to Monaco's obligations under this Agreement that all of the
following are delivered on or before the Closing Date:
(a) The Loan Purchase Agreements.
(b) The Loan Loss Reimbursement Agreement and the "Letters of Credit"
(as that term is defined in the Loan Loss Reimbursement Agreement).
(c) The Monaco Pledge Agreement.
(d) A certificate of the Secretary or an Assistant Secretary of PSB
certifying as to (i) the actions referred to in Section 4.5(b), (ii) a true
and correct copy of the Federal Stock Charter of PSB, and (iii) the
authorization and incumbency of the officers of PSB that executed this
Agreement and the other agreements, instruments and certificates to be
delivered by PSB pursuant to this Agreement.
(e) A good standing certificate with respect to PSB, dated as of a
recent date.
(f) The opinion of counsel for PSB, in the form agreed to between
PSB's counsel and Monaco.
3.10 Deliveries by PCF. PCF hereby covenants and agrees to deliver
or cause to be delivered the following on or before the Closing Date, subject
to the other terms and conditions of this Agreement, and it shall be a
condition to Monaco's obligations under this Agreement that all of the
following are delivered on or before the Closing Date:
(a) A certificate of the Secretary or an Assistant Secretary of PCF
certifying as to (i) the actions referred to in Section 4.6(b), (ii) a true
and correct copy of the Certificate of Formation of PCF, and (iii) the
authorization and incumbency of the officers of PCF that executed this
Agreement and the other agreements, instruments and certificates to be
delivered by PCF pursuant to this Agreement.
(b) A good standing certificate with respect to PCF, dated as of a
recent date.
(c) The opinion of counsel for PCF, in the form agreed to between
PCF's counsel and Monaco.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Monaco. Monaco hereby
represents and warrants to Pacific USA, PSB, NAFCO, Advantage, and PCF (all
such representations and warranties being made as of the Closing Date, except
as otherwise specifically provided) as follows:
(a) Organization and Good Standing. Monaco is a corporation duly
organized, validly existing and in good standing under the law of the State of
Colorado and is qualified to transact business in each State where the nature
of its business requires it to qualify, except to the extent that the failure
to so qualify would not in the aggregate materially adversely affect the
ability of Monaco to perform its obligations hereunder.
(b) Authorization. Monaco has the power, authority and legal right
to execute, deliver and perform under the terms of this Agreement and the
execution, delivery and performance of this Agreement has been duly authorized
by Monaco by all necessary corporate action.
(c) Binding Obligation. This Agreement, assuming the due
authorization, execution and delivery by the other parties hereto, constitutes
a legal, valid and binding obligation of Monaco, enforceable against Monaco in
accordance with its terms except that (A) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
(whether statutory, regulatory or decisional) now or hereafter in effect
relating to creditors' rights generally and (B) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to certain equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought, whether a proceeding at law or in
equity.
(d) No Violation. The consummation of the transactions
contemplated by the fulfillment of the terms of this Agreement will not
conflict with, result in any breach of any of the terms and provisions of or
constitute (with or without notice, lapse of time or both) a default under the
organizational documents or bylaws of Monaco, or any indenture, agreement,
mortgage, deed of trust or other instrument to which Monaco is a party or by
which it is bound, or in the creation or imposition of any lien upon any of
its properties pursuant to the terms of such indenture, agreement, mortgage,
deed of trust or other such instrument, or violate any law, or any order, rule
or regulation applicable to Monaco of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over Monaco or any of its properties.
(e) Approvals. All approvals, authorizations, consents, orders or
other actions of any person, or of any court, governmental agency or body or
official, required in connection with the execution and delivery of this
Agreement have been or will be taken or obtained on or prior to the Closing
Date.
(f) Transaction Shares. All of the Transaction Shares have been
duly authorized, and upon delivery thereof to NAFCO (or its designee),
Advantage (or its designee) and PSB (or its designee) following the receipt by
Monaco of the Monaco Shareholders' Approval in accordance with the provisions
hereof, shall be validly issued, fully paid and non-assessable, free and clear
of all pledges, liens, encumbrances and restrictions, except restrictions on
transfer arising under applicable securities laws, rules and regulations.
(g) Capital Stock. On the date hereof, the authorized capital
stock of Monaco consists of 17,750,000 shares of Class A Common Stock, of
which 7,140,379 shares are issued and outstanding, 2,250,000 shares of Class B
Common Stock, of which 1,311,715 shares are issued and outstanding, and
5,000,000 shares of preferred stock, no par value, of which no shares are
issued and outstanding. Monaco shall not issue any shares of preferred stock
prior to the Closing Date.
(h) Securities Laws. Under the circumstances contemplated by this
Agreement and assuming the accuracy of the representations of NAFCO,
Advantage, and PSB in Sections 4.3(f),and 4.4(f) and 4.5(f), respectively,
the offer, issuance, sale and delivery of the Transaction Shares will not,
under current laws and regulations, require compliance with the prospectus
delivery or registration requirements of the Securities Act.
(i) SEC Filings. As of the date hereof, Monaco has made all
filings that it is required to make with the Commission under the Exchange Act
(the "Company SEC Reports") and will make all such filings as are required in
connection with the Transaction. As of their respective dates, the Company
SEC Reports did not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(j) Private Resale. Monaco will acquire the Warrants described in
Section 2.1(a)(iii) for investment, and not for the interest of any other
person, not for resale to any other person and not with a view to or in
connection with any sale or distribution. Monaco acknowledges that the
Warrants are "restricted securities" as defined in Rule 144(a)(3) under the
Securities Act and subject to substantial restrictions on transfer, and that
the certificates representing the Warrants will bear restrictive legends. In
addition, Monaco is an "accredited investor" as that term is defined in Rule
501(a) of Regulation D under the Securities Act. Monaco has had access to the
books and records of the issuers of the Warrants and has received from such
issuers and other sources all information required by it in order to make an
informed investment decision with respect to the Warrants.
(k) No Default or Breach. Monaco is not in default or in breach of
any agreement or instrument to which Monaco is a party or by which it is
bound, except for defaults or breaches which in the aggregate would not
materially hinder or impair the consummation of the Transaction.
(l) No Misstatement, Etc. Monaco has not made any misstatements of
fact or omitted to state any fact necessary or desirable to make complete,
accurate, and not misleading every representation or warranty set forth in
this Agreement.
(m) No Brokers. No broker, finder, agent or similar intermediary
(other than SPGC, LLC and The Stone Pine Companies) has acted for or on behalf
of Monaco in connection with the Transaction, and no such Person (other than
SPGC, LLC and The Stone Pine Companies) is or will be entitled to any
broker's, finders or similar fee or other commission in connection therewith
based on any agreement, arrangement or understanding with Monaco or any action
taken by Monaco, and the responsibility to pay any or all of such amounts to
SPGC, LLC and/or The Stone Pine Companies is and shall be the sole
responsibility of Monaco.
4.2 Representations and Warranties of Pacific USA. Pacific USA
hereby represents and warrants to Monaco (all such representations and
warranties being made as of the Closing Date, except as otherwise specifically
provided) as follows:
(a) Organization and Good Standing. Pacific USA is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Texas and is qualified to transact business in each State where the
nature of its business requires it to qualify, except to the extent that the
failure to so qualify would not in the aggregate materially adversely affect
the ability of Pacific USA to perform its obligations hereunder.
(b) Authorization. Pacific USA has the power, authority and legal
right to execute, deliver and perform under the terms of this Agreement and
the execution, delivery and performance of this Agreement has been duly
authorized by Pacific USA by all necessary corporate action.
(c) Binding Obligation. This Agreement, assuming due
authorization, execution and delivery by Monaco, constitutes a legal, valid
and binding obligation of Pacific USA, enforceable against Pacific USA in
accordance with its terms except that (A) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
(whether statutory, regulatory or decisional) now or hereafter in effect
relating to creditors' rights generally and (B) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to certain equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought, whether a proceeding at law or in
equity.
(d) No Violation. The consummation of the transactions
contemplated by the fulfillment of the terms of this Agreement will not
conflict with, result in any breach of any of the terms and provisions of or
constitute (with or without notice, lapse of time or both) a default under the
organizational documents or bylaws of Pacific USA, or any indenture,
agreement, mortgage, deed of trust or other instrument to which Pacific USA is
a party or by which it is bound, or in the creation or imposition of any lien
upon any of its properties pursuant to the terms of such indenture,
agreement, mortgage, deed of trust or other such instrument, or violate any
law, or any order, rule or regulation applicable to Pacific USA of any court
or of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over Pacific USA or any of
its properties.
(e) Approvals. All approvals, authorizations, consents, orders or
other actions of any person, or of any court, governmental agency or body or
official, required in connection with the execution and delivery of this
Agreement have been or will be taken or obtained on or prior to the Closing
Date.
(f) No Default or Breach. Pacific USA is not in default or in
breach of any agreement or instrument to which Pacific USA is a party or by
which it is bound, except for defaults or breaches which in the aggregate
would not materially hinder or impair the consummation of the Transaction.
(g) No Misstatements, Etc.. Pacific USA has not made any
misstatements of fact or omitted to state any fact necessary or desirable to
make complete, accurate, and not misleading every representation or warranty
set forth in this Agreement.
(h) No Brokers. No broker, finder, agent or similar intermediary
has acted for or on behalf of Pacific USA in connection with the Transaction,
and no such Person is or will be entitled to any broker's, finders or similar
fee or other commission in connection therewith based on any agreement,
arrangement or understanding with Pacific USA or any action taken by Pacific
USA.
(i) General. The NAFCO Loans, the Advantage Loans, and the
Warrants do not constitute substantially all of the assets of Pacific USA.
4.3 Representations and Warranties of NAFCO. NAFCO hereby
represents and warrants to Monaco (all such representations and warranties
being made as of the Closing Date, except as otherwise specifically provided)
as follows:
(a) Organization and Good Standing. NAFCO is a limited liability
company duly organized, validly existing and in good standing under the laws
of the State of Delaware and is qualified to transact business in each State
where the nature of its business requires it to qualify, except to the extent
that the failure to so qualify would not in the aggregate materially adversely
affect the ability of NAFCO to perform its obligations hereunder.
(b) Authorization. NAFCO has the power, authority and legal right
to execute, deliver and perform under the terms of this Agreement and the
execution, delivery and performance of this Agreement has been duly
authorized by NAFCO by all necessary corporate action.
(c) Binding Obligation. This Agreement, assuming due
authorization, execution and delivery by Monaco, constitutes a legal, valid
and binding obligation of NAFCO, enforceable against NAFCO in accordance with
its terms except that (A) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws (whether
statutory, regulatory or decisional) now or hereafter in effect relating to
creditors' rights generally and (B) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to certain
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought, whether a proceeding at law or in equity.
(d) No Violation. The consummation of the transactions
contemplated by the fulfillment of the terms of this Agreement will not
conflict with, result in any breach of any of the terms and provisions of or
constitute (with or without notice, lapse of time or both) a default under the
organizational documents or operating agreement of NAFCO, or any indenture,
agreement, mortgage, deed of trust or other instrument to which NAFCO is a
party or by which it is bound, or in the creation or imposition of any lien
upon any of its properties pursuant to the terms of such indenture,
agreement, mortgage, deed of trust or other such instrument, or violate any
law, or any order, rule or regulation applicable to NAFCO of any court or of
any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over NAFCO or any of its
properties.
(e) Approvals. All approvals, authorizations, consents, orders or
other actions of any person, or of any court, governmental agency or body or
official, required in connection with the execution and delivery of this
Agreement have been or will be taken or obtained on or prior to the Closing
Date.
(f) Private Placement. Except as contemplated by this Agreement,
NAFCO and/or its designee will acquire the NAFCO Shares for investment, and
not for the interest of any other person, not for resale to any other Person
and not with a view to or in connection with any sale or distribution. NAFCO
acknowledges, and acknowledges on behalf of any designee of NAFCO, that the
NAFCO Shares will be "restricted securities" as defined in Rule 144(a)(3)
under the Securities Act and subject to substantial restrictions on transfer,
and that the certificates representing the NAFCO Shares will bear restrictive
legends. In addition, NAFCO represents and warrants that it is (and that any
designee of NAFCO will be) an "accredited investor" as that term is defined in
Rule 501(a) of Regulation D under the Securities Act. NAFCO further
represents and warrants that it and/or its designee has had access to the
books and records of Monaco and has received from Monaco and other sources all
information required by it in order to make an informed investment decision
with respect to the NAFCO Shares including, without limitation, (i) all
reports filed by Monaco with the Commission pursuant to Section 13 under the
Securities Exchange Act of 1934, (ii) all annual reports to its shareholders,
(iii) the opportunity to ask questions and receive answers concerning the
terms and conditions of the sale of such securities, which questions have been
answered to its satisfaction, and (iv) all additional information requested by
NAFCO and/or its designee which Monaco possesses or could acquire without
unreasonable effort or expense to verify the accuracy of the information
furnished to NAFCO and/or its designee, which information has been provided to
NAFCO and/or its designee, as applicable.
(g) Ownership of NAFCO Loans. Immediately prior to the
consummation of the transactions contemplated hereby to be consummated on the
Closing Date, NAFCO will be the sole owner of and will have full right to
transfer the NAFCO Loans to Monaco, and the NAFCO Loans will be free and clear
of any Adverse Claim.
(h) No Default or Breach. NAFCO is not in default or in breach of
any agreement or instrument to which NAFCO is a party or by which it is bound,
except for defaults or breaches which in the aggregate would not materially
hinder or impair the consummation of the Transaction.
(i) No Misstatements, Etc. NAFCO has not made any misstatements of
fact or omitted to state any fact necessary or desirable to make complete,
accurate, and not misleading every representation or warranty set forth in
this Agreement.
(j) No Brokers. No broker, finder, agent or similar intermediary
has acted for or on behalf of NAFCO (or any designee of NAFCO) in connection
with the Transaction, and no such Person is or will be entitled to any
broker's, finders or similar fee or other commission in connection therewith
based on any agreement, arrangement or understanding with, or any action taken
by, NAFCO (or any designee of NAFCO).
(k) General. It is NAFCO's present intention that at all times
prior to and immediately after the consummation of the Transaction, NAFCO will
continue to operate in the consumer finance business.
(l) NAFCO Loans. None of the NAFCO Loans was originally originated
by PSB.
4.4 Representations and Warranties of Advantage. Advantage hereby
represents and warrants to Monaco (all such representations and warranties
being made as of the Closing Date, except as otherwise specifically provided)
as follows:
(a) Organization and Good Standing. Advantage is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and is qualified to transact business in each State where
the nature of its business requires it to qualify, except to the extent that
the failure to so qualify would not in the aggregate materially adversely
affect the ability of Advantage to perform its obligations hereunder.
(b) Authorization. Advantage has the power, authority and legal
right to execute, deliver and perform under the terms of this Agreement and
the execution, delivery and performance of this Agreement has been duly
authorized by Advantage by all necessary corporate action.
(c) Binding Obligation. This Agreement, assuming due
authorization, execution and delivery by Monaco, constitutes a legal, valid
and binding obligation of Advantage, enforceable against Advantage in
accordance with its terms except that (A) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
(whether statutory, regulatory or decisional) now or hereafter in effect
relating to creditors' rights generally and (B) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to certain equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought, whether a proceeding at law or in
equity.
(d) No Violation. The consummation of the transactions
contemplated by the fulfillment of the terms of this Agreement will not
conflict with, result in any breach of any of the terms and provisions of or
constitute (with or without notice, lapse of time or both) a default under the
organizational documents or bylaws of Advantage, or any indenture, agreement,
mortgage, deed of trust or other instrument to which Advantage is a party or
by which it is bound, or in the creation or imposition of any lien upon any of
its properties pursuant to the terms of such indenture, agreement, mortgage,
deed of trust or other such instrument, or violate any law, or any order, rule
or regulation applicable to Advantage of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over Advantage or any of its properties.
(e) Approvals. All approvals, authorizations, consents, orders or
other actions of any person, or of any court, governmental agency or body or
official, required in connection with the execution and delivery of this
Agreement have been or will be taken or obtained on or prior to the Closing
Date.
(f) Private Placement. Except as contemplated by this Agreement,
Advantage and/or its designee will acquire the Advantage Preferred Shares for
investment, and not for the interest of any other Person, not for resale to
any other person and not with a view to or in connection with any sale or
distribution. Advantage acknowledges, and acknowledges on behalf of any
designee of Advantage, that the Advantage Preferred Shares will be "restricted
securities" as defined in Rule 144(a)(3) under the Securities Act and subject
to substantial restrictions on transfer, and that the certificates
representing the Advantage Preferred Shares will bear restrictive legends In
addition, Advantage represents and warrants that it is (and that any designee
of Advantage will be) an "accredited investor" as that term is defined in Rule
501(a) of Regulation D under the Securities Act. Advantage further represents
and warrants that it and/or its designee has had access to the books and
records of Monaco and has received from Monaco and other sources all
information required by it in order to make an informed investment decision
with respect to the Advantage Preferred Shares including, without limitation,
(i) all reports filed by Monaco with the Commission pursuant to Section 13
under the Securities Exchange Act of 1934, (ii) all annual reports to its
shareholders, (iii) the opportunity to ask questions and receive answers
concerning the terms and conditions of the sale of such securities, which
questions have been answered to its satisfaction, and (iv) all additional
information requested by Advantage and/or its designee which Monaco possesses
or could acquire without unreasonable effort or expense to verify the accuracy
of the information furnished to Advantage and/or its designee, which
information has been provided to Advantage and/or its designee, as applicable.
(g) Ownership of Advantage Loans. Immediately prior to the
consummation of the transactions contemplated hereby to be consummated on the
Closing Date, Advantage will be the sole owner of and will have full right to
transfer the Advantage Loans to Monaco, and the Advantage Loans will be free
and clear of any Adverse Claim.
(h) No Default or Breach. Advantage is not in default or in breach
of any agreement or instrument to which Advantage is a party or by which it is
bound, except for defaults or breaches which in the aggregate would not
materially hinder or impair the consummation of the Transaction.
(i) No Misstatements, Etc. Advantage has not made any
misstatements of fact or omitted to state any fact necessary or desirable to
make complete, accurate, and not misleading every representation or warranty
set forth in this Agreement.
(j) No Brokers. No broker, finder, agent or similar intermediary
has acted for or on behalf of Advantage (or any designee of Advantage) in
connection with the Transaction, and no such Person is or will be entitled to
any broker's, finders or similar fee or other commission in connection
therewith based on any agreement, arrangement or understanding with, or any
action taken by, Advantage (or any designee of Advantage).
(k) General. It is Advantage's present intention that at all times
prior to and immediately after the consummation of the Transaction, Advantage
will continue to operate its business as conducted by it as of the date
hereof.
(l) Advantage Loans. None of the Advantage Loans was originally
originated by PSB.
4.5 Representations and Warranties of PSB. PSB hereby represents
and warrants to Monaco (all such representations and warranties being made as
of the Closing Date, except as otherwise specifically provided) as follows:
(a) Organization and Good Standing. PSB is a bank duly organized,
validly existing and in good standing under the laws of the United States of
America and is qualified to transact business in each State where the nature
of its business requires it to qualify, except to the extent that the failure
to so qualify would not in the aggregate materially adversely affect the
ability of PSB to perform its obligations hereunder.
(b) Authorization. PSB has the power, authority and legal right to
execute, deliver and perform under the terms of this Agreement and the
execution, delivery and performance of this Agreement has been duly
authorized by PSB by all necessary corporate action.
(c) Binding Obligation. This Agreement, assuming due
authorization, execution and delivery by Monaco, constitutes a legal, valid
and binding obligation of PSB, enforceable against PSB in accordance with its
terms except that (A) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws (whether
statutory, regulatory or decisional) now or hereafter in effect relating to
creditors' rights generally and (B) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to certain
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought, whether a proceeding at law or in equity.
(d) No Violation. The consummation of the transactions
contemplated by the fulfillment of the terms of this Agreement will not
conflict with, result in any breach of any of the terms and provisions of or
constitute (with or without notice, lapse of time or both) a default under the
organizational documents or bylaws of PSB, or any indenture, agreement,
mortgage, deed of trust or other instrument to which PSB is a party or by
which it is bound, or in the creation or imposition of any lien upon any of
its properties pursuant to the terms of such indenture, agreement, mortgage,
deed of trust or other such instrument, or violate any law, or any order, rule
or regulation applicable to PSB of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over PSB or any of its properties.
(e) Approvals. All approvals, authorizations, consents, orders or
other actions of any person, or of any court, governmental agency or body or
official, required in connection with the execution and delivery of this
Agreement have been or will be taken or obtained on or prior to the Closing
Date.
(f) Private Placement. PSB and/or its designee will acquire the
PSB Shares for investment, and not for the interest of any other Person, not
for resale to any other person and not with a view to or in connection with
any sale or distribution. PSB acknowledges, and acknowledges on behalf of any
designee of PSB, that the PSB Shares will be "restricted securities" as
defined in Rule 144(a)(3) under the Securities Act and subject to substantial
restrictions on transfer, and that the certificates representing the PSB
Shares will bear restrictive legends. In addition, PSB represents and
warrants that it is (and that any designee of PSB will be) an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D under the
Securities Act. PSB further represents and warrants that each of PSB and/or
its designee has had access to the books and records of Monaco and has
received from Monaco and other sources all information required by it in order
to make an informed investment decision with respect to the PSB Shares
including, without limitation, (i) all reports filed by Monaco with the
Commission pursuant to Section 13 under the Securities Exchange Act of 1934,
(ii) all annual reports to its shareholders, (iii) the opportunity to ask
questions and receive answers concerning the terms and conditions of the sale
of such securities, which questions have been answered to its satisfaction,
and (iv) all additional information requested by PSB and/or its designee which
Monaco possesses or could acquire without unreasonable effort or expense to
verify the accuracy of the information furnished to PSB and/or its designee,
which information has been provided to PSB and/or its designee, as applicable.
(g) No Default or Breach. PSB is not in default or in breach of
any agreement or instrument to which PSB is a party or by which it is bound,
except for defaults or breaches which in the aggregate would not materially
hinder or impair the consummation of the Transaction.
(h) No Misstatements, Etc. PSB has not made any misstatements of
fact or omitted to state any fact necessary or desirable to make complete,
accurate, and not misleading every representation or warranty set forth in
this Agreement.
(i) No Brokers. No broker, finder, agent or similar intermediary
has acted for or on behalf of PSB (or any designee of PSB) in connection with
the Transaction, and no such Person is or will be entitled to any broker's,
finders or similar fee or other commission in connection therewith based on
any agreement, arrangement or understanding with, or any action taken by, PSB
(or any designee of PSB).
(j) General. It is PSB's present intention that at all times prior
to and immediately after the consummation of the Transaction, PSB will
continue to operate its business as conducted by it as of the date hereof;
provided that it is PSB's intention to sell substantially all of its banking
operations in 1998.
4.6 Representations and Warranties of PCF. PCF hereby represents
and warrants to Monaco (all such representations and warranties being made as
of the Closing Date, except as otherwise specifically provided) as follows:
(a) Organization and Good Standing. PCF is a limited liability
company duly organized, validly existing and in good standing under the laws
of the State of Delaware and is qualified to transact business in each State
where the nature of its business requires it to qualify, except to the extent
that the failure to so qualify would not in the aggregate materially adversely
affect the ability of PCF to perform its obligations hereunder.
(b) Authorization. PCF has the power, authority and legal right to
execute, deliver and perform under the terms of this Agreement and the
execution, delivery and performance of this Agreement has been duly
authorized by PCF by all corporate action.
(c) Binding Obligation. This Agreement, assuming due
authorization, execution and delivery by Monaco, constitutes a legal, valid
and binding obligation of PCF, enforceable against PCF in accordance with its
terms except that (A) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws (whether
statutory, regulatory or decisional) now or hereafter in effect relating to
creditors' rights generally and (B) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to certain
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought, whether a proceeding at law or in equity.
(d) No Violation. The consummation of the transactions
contemplated by the fulfillment of the terms of this Agreement will not
conflict with, result in any breach of any of the terms and provisions of or
constitute (with or without notice, lapse of time or both) a default under the
organizational documents or operating agreement of PCF, or any indenture,
agreement, mortgage, deed of trust or other instrument to which PCF is a party
or by which it is bound, or in the creation or imposition of any lien upon any
of its properties pursuant to the terms of such indenture, agreement,
mortgage, deed of trust or other such instrument, or violate any law, or any
order, rule or regulation applicable to PCF of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over PCF or any of its properties.
(e) Approvals. All approvals, authorizations, consents, orders or
other actions of any person, or of any court, governmental agency or body or
official, required in connection with the execution and delivery of this
Agreement have been or will be taken or obtained on or prior to the Closing
Date.
(f) Ownership of ADA Equity Interest and other Warrants.
Immediately prior to the consummation of the transactions contemplated hereby
which are to take place on the Closing Date: (i) PCF will be the sole owner
of and will have full right to transfer the ADA Equity Interest to Monaco
subject to the right of first refusal in favor of other shareholders of ADA
Capital Corporation and applicable securities laws, and the ADA Equity
Interest will be free and clear of any Adverse Claim; and (ii) PCF will be the
sole owner of and will have full right to transfer all of the Warrants (other
than the Restricted Warrants) to Monaco, and all of the Warrants (other than
the Restricted Warrants) will be free and clear of any Adverse Claim.
(g) No Default or Breach. PCF is not in default or in breach of
any agreement or instrument to which PCF is a party or by which it is bound,
except for defaults or breaches which in the aggregate would not materially
hinder or impair the consummation of the Transaction.
(h) No Misstatements, Etc. PCF has not made any misstatements of
fact or omitted to state any fact necessary or desirable to make complete,
accurate, and not misleading every representation or warranty set forth in
this Agreement.
(i) No Brokers. No broker, finder, agent or similar intermediary
has acted for or on behalf of PCF (or any designee of PCF) in connection with
the Transaction, and no such Person is or will be entitled to any broker's,
finders or similar fee or other commission in connection therewith based on
any agreement, arrangement or understanding with, or any action taken by, PCF
(or any designee of PCF).
4.7 Joint Representations and Warranties of NAFCO and Advantage.
NAFCO and Advantage jointly and severally represent and warrant to Monaco that
as of the Cut-Off Date, no more than twelve percent (12%) of the aggregate
number of Acquired Loans will be between thirty-one (31) and fifty-nine (59)
days past due with respect to any regularly scheduled monthly payment or
principal and/or interest from the related Obligors.
ARTICLE V
COVENANTS OF MONACO
5.1 Certain Covenants of Monaco. Monaco covenants and agrees for
the benefit of NAFCO (and any designee of NAFCO to which any Transaction
Shares have been issued) as follows:
(a) Within ninety (90) days after the end of each calendar year
during the Pricing Period, Monaco shall give NAFCO a statement prepared by
Monaco (and audited by Ehrhardt, Keefe, Steiner & Hottman or such other firm
as is then acting as Monaco's auditors) confirming the accuracy of Monaco's
calculations) showing the computation of the Pre-Tax Earnings of the
Designated NAFCO Operations for such calendar year, and shall make the
delivery of the shares of Class A Common Stock or the Monaco/ANO Note I and
the Monaco/ANO Note II, as applicable, to NAFCO (or its designees) to be made
pursuant to Section 2.2(c) on the basis of such computations. All such
statements will also be accompanied by complete financial statements of Monaco
for such calendar year, which shall be audited. For sixty (60) days after the
receipt of any such statement, NAFCO and its agents shall be entitled to
inspect the books of Monaco relating to the operations which provide the basis
for the computation of the Pre-Tax Earnings set forth in such statement, such
inspection to be completed within thirty (30) days after access to such books
are granted. If NAFCO shall notify Monaco in writing prior to the end of such
30-day period that it disagrees with the computation of Pre-Tax Earnings
contained in such statement, the determination of such Pre-Tax Earnings shall
be submitted to Ehrhardt, Keefe, Steiner & Hottman (or such other firm as is
then acting as Monaco's auditors), a second firm of independent certified
public accountants to be named by NAFCO and a third firm of independent
certified public accountants to be selected by both such firms (or if such
third firm is not so selected, a third firm of independent certified public
accountants designated by the American Arbitration Association), and the
decision of a majority thereof shall be binding upon all the parties to this
Agreement. The fees and expenses incurred in connection with all such
determinations of Ehrhardt, Keefe, Steiner & Hottman (or such other firm as
is then acting as Monaco's auditors) shall be borne by Monaco, of the second
firm of independent certified public accountants named by NAFCO shall be borne
by NAFCO, and of such third firm shall be borne one-half each by Monaco and
NAFCO. If NAFCO does not notify Monaco in writing prior to the end of such
30-day period that it disagrees with the computation of the Pre-Tax Earnings
contained in the statement, such computation shall be binding upon all the
parties hereto.
(b) From and after the Closing Date, Monaco shall maintain and
operate the Designated NAFCO Operations as a separate and identifiable
division and will maintain all books and records required for the
determination of Pre-Tax Earnings during the Pricing Period.
(c) From and after the Closing Date, Monaco will attempt in good
faith to advance the business of the Designated NAFCO Operations, will offer
the NAFCO Loan Originators the same types of loan programs as are offered by
Monaco to other originators (which Monaco terms "loan production offices"),
will not divert the business or assets of the Designated NAFCO Operations to
any other organization or entity, will not shift earnings of the Designated
NAFCO Operations to periods outside the Pricing Period, will not shift
expenses of the Acquired Operations properly allocable to periods outside the
Pricing Period to the Pricing Period, and will at all times exercise good
faith in making any decisions affecting the Designated NAFCO Operations.
(d) Monaco shall keep in full effect its existence, rights and
franchises as a corporation, and shall obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement and to perform its duties under this
Agreement. Any Person into which Monaco may be merged or consolidated, or to
whom Monaco has sold substantially all of its assets, or any corporation
resulting from any merger, conversion or consolidation to which Monaco shall
be a party, shall be the successor of Monaco hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto; provided, however, that such successor shall execute an agreement of
assumption, in form reasonably satisfactory to NAFCO, to perform every
covenant of Monaco under this Agreement.
(e) Monaco will promptly furnish to NAFCO from time to time upon
written request such information regarding the business and affairs and
financial condition of the Designated NAFCO Operations as NAFCO may reasonably
request, and will furnish to NAFCO monthly reports, promptly after becoming
available and in any event within 30 days after the end of each month
following the Closing Date and through the end of the Pricing Period, the
balance sheet of the Designated NAFCO Operations as of the end of such period,
the statements in income, and statements of cash flow of the Designated NAFCO
Operations for such month and for the period from the beginning of the Pricing
Period (for the month beginning February 1998), certified by the principal
financial officer of Monaco to have been prepared in accordance with generally
accepted accounting principles consistently followed throughout the period
indicated, except to the extent stated therein, subject to normal changes
resulting from year-end adjustment.
(f) Monaco will permit any officer, employee or agent of NAFCO to
examine the books and records relating to the Designated NAFCO Operations,
take copies and extracts therefrom, and discuss the affairs, finances and
accounts of the Designated NAFCO Operations with Monaco's officers,
accountants and auditors, upon reasonable request and during normal business
hours so as not to interfere with Monaco's normal operations.
(g) Except in connection with the transfer of assets in a
securitization transaction or similar financing arrangement, Monaco will not
sell, transfer, dissolve or otherwise dispose of the business operations
relating to the Designated NAFCO Operations after the Closing Date and prior
to the end of the Pricing Period without the prior written consent of NAFCO.
ARTICLE VI
ADDITIONAL COVENANTS
6.1 Covenants of PSB, NAFCO and Advantage. PSB, NAFCO and
Advantage each covenant and agree to promptly provide such information and
assistance to Monaco as it shall reasonably require in connection with its
solicitation of proxies from the holders of its Class A and Class B Common
Stock in connection with the special meeting of its shareholders to be called
for the purpose of approving the Stock Issuances.
6.2 Covenants of all Parties. Each of the parties hereto shall
make all HSR Required Filings with the appropriate governmental authorities as
soon as possible and will use its best efforts to file same within ten (10)
calendar days following the Closing Date.
6.3 Covenants of NAFCO, Advantage, PSB, PCF, and Monaco.
(a) Monaco shall file with the Commission for its approval a proxy
statement relating to the Stock Issuances as soon as possible following the
Closing Date and will use its best efforts to file same within ten (10)
calendar days following the Closing Date. Thereafter, within four (4)
Business Days following the approval of such proxy statement by the
Commission, Monaco shall, by means of such proxy statement, seek to obtain the
Monaco Shareholders' Approval Morris Ginsburg and Irwin Sandler have
previously agreed to vote all shares of Class A and Class B Common Stock over
which they have voting power in favor of the Stock Issuances. If the Monaco
Shareholders' Approval is received and the parties hereto have received the
HSR Approval, then Monaco shall cause the Stock Issuances to take place and
shall deliver on the Determination Date:
(i) to NAFCO or its designee, the share certificates, in the form
agreed to between Monaco and NAFCO, representing the NAFCO Preferred Shares;
(ii) to NAFCO or its designee, with respect to the NAFCO Preferred
Shares, the Monaco/NAFCO Registration Rights Agreement;
(iii) to Advantage or its designee, the share certificates, in the
form agreed to between Monaco and Advantage, representing the Advantage
Preferred Shares;
(iv) to Advantage or its designee, with respect to the Advantage
Preferred Shares, the Monaco/Advantage Registration Rights Agreement;
(v) to PSB or its designee, the share certificates representing the
PSB Shares, or a fully executed instruction letter to Monaco's transfer agent
to issue such share certificates;
(vi) to PSB or its designee, with respect to the PSB Shares, the
Monaco/PSB Registration Rights Agreement; and
(vii) to NAFCO or its designee, Advantage or its designee, and PSB or
its designee, an opinion of counsel respecting such Stock Issuances, in form
and substance reasonably acceptable to Monaco and each of such other Persons.
In connection with the foregoing, each of NAFCO, Advantage, and PSB (or their
respective designees, as applicable) shall (or shall cause their respective
designees, as applicable, to) duly execute and deliver (on the Determination
Date) the registration rights agreement to which it is a party. If NAFCO,
Advantage, and/or PSB should designate a Person to which any of the
Transaction Shares are to be issued as provided herein, then it shall be a
condition precedent to the obligation of Monaco to deliver share certificates
representing such Transaction Shares to such designee (either on the
Determination Date or at any time thereafter) that such designee shall execute
and deliver to Monaco an agreement whereby it makes the same representations
and warranties to Monaco as are made by NAFCO, Advantage, and PSB in Sections
4.3(f), 4.4(f), and 4.5(f). If the parties hereto shall have received the
HSR Approval, and Monaco shall have received the Monaco Shareholders' Approval
and caused the Stock Issuances, then the Monaco Pledge Agreement shall
automatically terminate and be of no further force and effect.
(b) From and after the Closing Date, each of NAFCO and PCF shall use
its best efforts to cause the transfer of any Restricted Warrants to Monaco in
compliance with the restrictions applicable thereto.
ARTICLE VII
MISCELLANEOUS
7.1 Notices. All notices, requests, consents and other
communications required or permitted hereunder or under any other Asset
Purchase Document shall be in writing and shall be personally delivered,
transmitted via facsimile or overnight courier service or mailed first-class
postage prepaid, registered or certified mail,
(a) if to Pacific USA, PSB, NAFCO, Advantage, and/or PCF:
c/o Pacific USA Holdings Corp.
5999 Summerside Drive, Suite 112
Dallas, Texas 75252
Attn: Bill C. Bradley, Chief Executive Officer
Facsimile No.: (972) 248-5023
With a Copy to:
Pacific USA Holdings Corp.
3200 Southwest Freeway, Suite 1220
Houston, Texas 77027
Attn: Cathryn L. Porter, Chief General Counsel
Facsimile No.: (713) 871-0155
(b) if to Monaco:
Monaco Finance, Inc.
370 Seventeenth Street, Suite 5060
Denver, Colorado 80202
Attn: Irwin L. Sandler, Executive Vice President
Facsimile No.: (303) 405-6496
and such notices and other communications shall for all purposes of this
Agreement and any other Asset Purchase Document be treated as being effective
or having been given on the date when personally delivered or when transmitted
by facsimile (if confirmation of facsimile receipt has been given), on the
date after being deposited with an overnight courier service, or, if sent by
mail, four days after deposit in the United States mail, postage prepaid. Any
party may change its address for notice by notifying the other party pursuant
to the above notice provisions.
7.2 Counterparts. This Agreement may be executed in two or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed and delivered will be deemed to be an original but
all of which together will constitute one and the same instrument. Delivery
of an executed counterpart of the signature page to this Agreement by
telefacsimile shall be effective as delivery of a manually executed
counterpart of this Agreement, and any party delivering such an executed
counterpart of this Agreement by telefacsimile to any other party shall
thereafter also promptly deliver a manually executed counterpart of this
Agreement to such other party; provided that the failure to deliver such
manually executed counterpart shall not affect the validity, enforceability,
or binding effect of this Agreement.
7.3 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.
(A) THIS AGREEMENT AND THE ASSET PURCHASE DOCUMENTS SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS.
(B) IN ANY LEGAL ACTION RELATING TO THIS AGREEMENT OR THE ASSET
PURCHASE DOCUMENTS OR RELATING TO ANY OTHER DEALINGS AND NEGOTIATIONS BETWEEN
THE PARTIES, EACH PARTY AGREES (I) TO THE EXERCISE OF JURISDICTION OVER IT BY
A FEDERAL COURT SITTING IN DALLAS, TEXAS OR DENVER, COLORADO; AND (II) IF
EITHER PARTY BRINGS A LEGAL ACTION, IT SHALL BE INSTITUTED IN ONE OF THE
COURTS SPECIFIED IN SUBPARAGRAPH (I) ABOVE.
(C) THE PARTIES EACH HEREBY WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY LEGAL ACTION WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR IN CONNECTION WITH
THIS AGREEMENT OR THE ASSET PURCHASE DOCUMENTS. INSTEAD, ANY LEGAL ACTION
RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
7.4 Binding Agreement. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
7.5 Amendments; No Waivers. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Pacific USA and Monaco, or in the case
of a waiver, by the party against whom the waiver is to be effective. No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
7.6 Securitization Matters. Notwithstanding anything to the
contrary contained herein, each of the parties hereto agrees that, in
connection with any securitization transaction contemplated under Section 9
of the Loan Loss Reimbursement Agreement, such party shall take such actions
(including, without limitation, the amendment or modification of any of the
Asset Purchase Documents and the delivery of opinions of counsel) as shall be
reasonably required by MBIA Insurance Corporation (or similar entity) and/or
any rating agency involved in any such securitization transaction; provided
that Monaco shall pay all of the reasonable out-of-pocket expenses, including,
without limitation, attorneys' fees, incurred by each such party in taking
such action(s); provided further that no party hereto shall be required to
take any such action if, in the good faith determination of such party, such
action would materially and adversely affect such party.
7.7 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions is not affected in any manner adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that
the transactions be consummated as originally contemplated to the fullest
extent possible.
7.8 Certain Rules of Construction. Unless otherwise specified
herein, section, exhibit, and schedule references are to this Agreement. All
of the exhibits and schedules hereto are incorporated herein by this
reference. Headings used herein are for convenience of reference only.
7.9 Confidentiality. Each Related Party hereby agrees that all
information obtained by such Person regarding the Acquired Loans from and
after the Closing Date shall be maintained in confidence and shall not be
disclosed to any other Person unless: (a) such disclosure does not violate
any applicable law or regulation or any proprietary rights of Monaco, any
subsidiary of Monaco, or any servicer of all or any of the Acquired Loans; (b)
such disclosure is ordered by a court of applicable jurisdiction; or (c) such
disclosure is made by such Related Party to its officers, directors, auditors,
attorneys, employees, professional consultants, or agents who would have
access to such information in the normal course of the performance of such
Related Party's duties; provided that such Related Party may make
disclosures with respect to any of the above matters to reinsurers or any
Person having regulatory authority over such Related Party.
7.10 Amendment and Restatement; Effectiveness. This Agreement
amends and restates the Original Agreement in its entirety. This Agreement
shall become effective as of the date first written above upon the execution
and delivery of a counterpart hereof by each of the parties hereto.
IN WITNESS WHEREOF, this Agreement has been signed and delivered by the
parties hereto as of the date first written above.
MONACO FINANCE, INC.,
a Colorado corporation
By: /s/ Irwin L. Sandler
Name: Irwin L. Sandler
Title: Executive Vice President
PACIFIC USA HOLDINGS CORP.,
a Texas corporation
By: /s/ Bill C. Bradley
Name: Bill C. Bradley
Title: Chief Executive Officer
PACIFIC SOUTHWEST BANK,
a federally chartered savings bank
By: /s/ Bobby Hashaway
Name: Bobby Hashaway
Title: Executive Vice President
NAFCO HOLDING COMPANY, LLC,
a Delaware limited liability Company
By: /s/ Robert Womack
Name: Robert Womack
Title: Chief Financial Officer
ADVANTAGE FUNDING GROUP, INC.,
a Delaware corporation
By: /s/ Robert Womack
Name: Robert Womack
Title: Vice President
PCF SERVICE, LLC,
a Delaware limited liability Company
By: /s/ Bobby Hashaway
Name: Bobby Hashaway
Title: Executive Vice President
EXHIBIT A-1
Form of Advantage Loan Purchase Agreement
SEE EXHIBIT 10.64 FILED WITH FORM 8-K DATED
JANUARY 23, 1998, FILED BY MONACO FINANCE, INC.
EXHIBIT C-1
Form of Certificate of Designation
SEE EXHIBIT 10.63 FILED WITH FORM 8-K DATED
JANUARY 23, 1998, FILED BY MONACO FINANCE, INC.
EXHIBIT L-1
Form of Loan Loss Reimbursement Agreement
SEE EXHIBIT 10.02 FILED HEREWITH.
EXHIBIT M-1
Form of
Monaco/Advantage Note, Monaco/ANO Note I, Monaco ANO Note II,
Monaco/NAFCO Note, and Monaco/PSB Note
SEE EXHIBIT 10.63 FILED WITH FORM 8-K DATED
JANUARY 23, 1998, FILED BY MONACO FINANCE, INC.
EXHIBIT M-2
Form of Monaco/Advantage Registration Rights Agreement
SEE EXHIBIT 10.63 FILED WITH FORM 8-K DATED
JANUARY 23, 1998, FILED BY MONACO FINANCE, INC.
EXHIBIT M-3
Form of Monaco/NAFCO Registration Rights Agreement
SEE EXHIBIT 10.63 FILED WITH FORM 8-K DATED
JANUARY 23, 1998, FILED BY MONACO FINANCE, INC.
EXHIBIT M-4
Form of Monaco Pledge Agreement
SEE EXHIBIT 10.63 FILED WITH FORM 8-K DATED
JANUARY 23, 1998, FILED BY MONACO FINANCE, INC.
EXHIBIT M-5
Form of Monaco/PSB Registration Rights Agreement
SEE EXHIBIT 10.63 FILED WITH FORM 8-K DATED
JANUARY 23, 1998, FILED BY MONACO FINANCE, INC.
EXHIBIT N-1
Form of NAFCO Loan Purchase Agreement
SEE EXHIBIT 10.66 FILED WITH FORM 8-K DATED
JANUARY 23, 1998, FILED BY MONACO FINANCE, INC.
EXHIBIT 3.5(C)
Form of Advantage Servicing Agreement
SEE EXHIBIT 10.67 FILED WITH FORM 8-K DATED
JANUARY 23, 1998, FILED BY MONACO FINANCE, INC.
EXHIBIT 3.5(D)
Form of NAFCO Servicing Agreement
SEE EXHIBIT 10.68 FILED WITH FORM 8-K DATED
JANUARY 23, 1998, FILED BY MONACO FINANCE, INC.
0 SEE EXHIBIT 10.6
EXHIBIT 10.02
LOAN LOSS REIMBURSEMENT AGREEMENT
This Loan Loss Reimbursement Agreement (this "Agreement") is entered into
as of January 8, 1998 between, on the one hand PACIFIC SOUTHWEST BANK, a
federally chartered savings bank ("PSB"), NAFCO HOLDING COMPANY, LLC, a
Delaware limited liability company ("NAFCO"), and ADVANTAGE FUNDING GROUP,
INC., a Delaware corporation ("Advantage"), and, on the other hand, MONACO
FINANCE, INC., a Colorado corporation ("Monaco").
RECITALS
A. PSB, NAFCO, Advantage, and Pacific USA Holdings Corp., a Texas
corporation ("Pacific USA"), and PCF Service, LLC, a Delaware limited
liability company are parties to that certain Amended and Restated Asset
Purchase Agreement, dated as of January 8, 1998 (as amended or modified from
time to time, the "Asset Purchase Agreement").
B. The execution of this Agreement is required pursuant to the Asset
Purchase Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Definitions. In addition to the terms defined elsewhere in this
Agreement, the following terms, when used herein, will have the following
meanings:
"Acquired Loans" has the meaning set forth in the Asset Purchase
Agreement; provided that "Acquired Loans" shall not include any Repurchased
Auto Loan after the date of the repurchase thereof.
"Advantage Loan Purchase Agreement" has the meaning set forth in the
Asset Purchase Agreement.
"Auto Loan" means a consumer Automobile loan, including installment sales
contracts, arising from the sale of Automobiles.
"Auto Loan Balance" means, at any time any determination thereof is to be
made: (a) the aggregate outstanding principal balance of the Acquired Loans
as of the close of business on the Cut-Off Date, determined after deduction of
all payments of principal received with respect to the Acquired Loans on or
before the close of business on the Cut-Off Date; minus (b) the principal
balance (as of the Cut-Off Date) of any Repurchased Auto Loans.
"Automobiles" means new and used automobiles and light trucks (i.e.,
light duty trucks with a maximum load capacity of 2,000 pounds), the purchase
of which the related Obligors financed by Auto Loans.
"Business Day" means any day, other than a Saturday or a Sunday, or
another day on which commercial banks in the States of New York, Colorado, or
Texas are required, or authorized by law, to close.
"Closing Date" has the meaning set forth in the Asset Purchase Agreement.
"Covered Loss" means either a Net Initial Loss or a Net Subsequent Loss
and "Covered Losses" means, subject to Section 2(a)(i) hereof, all Net
Initial Losses and/or Net Subsequent Losses; provided that "Covered Losses"
shall not include accrued and unpaid interest pertaining to Net Uncovered
Losses.
"Cut-Off Date" has the meaning set forth in the Asset Purchase Agreement.
"Defaulted Acquired Loan" means any Acquired Loan (a) that, by its terms,
has more than ten percent (10%) of any installment of principal or interest
that is 120 or more days contractually past due as measured from the date such
Scheduled Payment is due in accordance with the provisions of such Acquired
Loan or (b) that the applicable Servicer has determined to be uncollectible in
accordance with the governing Servicing Agreement and the written credit
procedures and policies (consistent with the requirements of this Agreement
and the Servicing Agreement) in effect from time to time of such Servicer as
approved by PSB (which approval shall not be unreasonably withheld).
"Designee" means any Person to which Monaco has assigned, in accordance
with the provisions of this Agreement, any of its rights to receive payments
of Covered Losses, its rights under this Agreement, including, without
limitation, Monaco's rights to enforce the duties and obligations of the
Related Parties under this Agreement with respect to any Acquired Loan, and
Monaco's rights under and with respect to the Letters of Credit.
"Expenses" means, with respect to Defaulted Acquired Loans and at any
time any determination thereof is to be made, all expenses (without
duplication of amounts) incurred by Monaco (or the Designee(s)) or any
Servicer in connection with the foreclosure, conservation, collection, and/or
liquidation of such Defaulted Acquired Loans and/or the related Automobiles,
as more specifically identified and subject to the limitations set forth on
Exhibit E-1 attached hereto.
"Federal Funds Rate" means, for any day, the rate, per annum (rounded
upwards, if necessary, to the nearest 0.01%), equal to the weighted average of
the rates of overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers on such day as published by
the Federal Reserve Bank of New York on the Business Day immediately following
such day; provided that, if the day for which such rate is to be determined
is not a Business Day, then the "Federal Funds Rate" for such day shall be
such rate on such transactions on the immediately following Business Day as
published on the Business Day immediately following such Business Day.
"Insurance Proceeds" means, with respect to any Acquired Loan and at any
time any determination thereof is to be made, an amount equal to the proceeds
paid by any insurer pursuant to any insurance policy covering such Acquired
Loan or the related Automobile or any other insurance policy that relates to
such Acquired Loan, but excluding the proceeds of any such insurance policy
that are applied to the restoration or repair of the related Automobile or
released to the Obligor in accordance with customary loan servicing
procedures.
"Letter of Credit" means, as appropriate, the Net Initial Losses Letter
of Credit and the Net Subsequent Losses Letter of Credit.
"Letter of Credit Bank" means: (a) Bankers Trust Company; (b) any other
financial institution whose long term debt, as of the date of its proposed
issuance of a Letter of Credit, is rated at least A3 by Moody's Investors
Service, Inc. and A- by Standard & Poor's Rating Services; (c) any other
financial institution that meets all of the following criteria: (i) such
financial institution has a total risk based capital ratio of not less than
10%; (ii) such financial institution has a Tier 1 ratio of not less than 6;
(iii) such financial institution has a CAMELS rating of 1 or 2; and (iv) such
financial institution has total assets of not less than $2,000,000,000; or (d)
any other financial institution that is acceptable to Monaco and/or the
Designee(s) in its and/or their sole discretion.
"Letters of Credit" means, collectively, the Net Initial Losses Letter of
Credit and the Net Subsequent Losses Letter of Credit.
"Loan Purchase Agreements" has the meaning set forth in the Asset
Purchase Agreement.
"Monaco's Accountants" means, at any time, the firm of independent
accountants retained by Monaco.
"NAFCO Loan Purchase Agreement" has the meaning set forth in the Asset
Purchase Agreement.
"Net Initial Losses" means the initial amount of Net Losses incurred up
to an aggregate amount equal to seven and one-half percent (7.5%) of the Auto
Loan Balance.
"Net Initial Losses Letter of Credit" means: (a) an irrevocable stand-by
letter of credit, substantially in the form attached hereto as Exhibit N-1,
with such changes, if any, as Monaco and the Designee(s) may approve, in the
original face amount of seven and one-half percent (7.5%) of the Auto Loan
Balance as of the close of business on the Cut-Off Date, issued by a Letter of
Credit Bank on behalf of PSB, NAFCO, and Advantage, and naming Monaco and/or
the Designee(s) as sole beneficiary(ies), and any amendments or extensions
thereof as permitted by the terms thereof or by the terms of Sections
2(a)(iv)(A) and (C) hereof; or (b) any letter of credit issued, in accordance
with the terms hereof (including Sections 2(a)(iv)(A) and (C) hereof), in
substitution for (i) the letter of credit referred to in clause (a) of this
definition or (ii) any letter of credit previously issued in accordance with
the terms hereof (including Section 2(a)(iv)(A) and (C) hereof) in
substitution for the letter of credit referred to in clause (a) of this
definition.
"Net Losses" means, at any time any determination thereof is to be made
for the period commencing on the Cut-Off Date and ending on such determination
date, an amount (not less than zero) equal to the sum of: (a) the Unpaid
Principal Balance of all Defaulted Acquired Loans minus all actual Net
Recoveries; plus (b) all accrued and unpaid interest on the Unpaid Principal
Balance of each Defaulted Acquired Loan for a period not to exceed
seventy-five (75) days; plus (c) all Expenses. For purposes of calculating
"Net Losses," accrued and unpaid interest with respect to any Defaulted
Acquired Loan that is a Precomputed Auto Loan shall be calculated as if such
Auto Loan were bearing interest calculable on a simple interest basis.
"Net Losses Report" means a report in the form of Exhibit N-2 attached
hereto.
"Net Principal Balance" means, with respect to any Precomputed Auto Loan,
the net payoff therefor less any accrued but unpaid late charges, all as of
the due date of the last full Scheduled Payment or, if more recent, the due
date of the last periodic payment of principal thereon.
"Net Recoveries" means, at any time any determination thereof is to be
made, an amount equal to all recoveries with respect to all Defaulted Acquired
Loans from whatever source, including, without limitation, all Proceeds, all
Insurance Proceeds, all payments from the related Obligor, and all amounts
recovered from the related Originator pursuant to the applicable Originator
Agreement or otherwise.
"Net Subsequent Losses" means Net Losses, up to an aggregate amount equal
to seven and one-half percent (7.5%) of the Auto Loan Balance, which are
incurred after the Net Initial Losses and the Net Uncovered Losses have been
incurred.
"Net Subsequent Losses Letter of Credit" means: (a) an irrevocable
stand-by letter of credit, substantially in the form attached hereto as
Exhibit N-1, with such changes, if any, as Monaco and the Designee(s) may
approve, in the original face amount of seven and one-half percent (7.5%) of
the Auto Loan Balance as of the close of business on the Cut-Off Date, issued
by a Letter of Credit Bank on behalf of PSB, NAFCO, and Advantage, and naming
Monaco and/or the Designee(s) as sole beneficiary(ies), and any amendments or
extensions thereof as permitted by the terms thereof or by the terms of
Sections 2(a)(iv)(B) and (C) hereof; or (b) any letter of credit issued, in
accordance with the terms hereof (including Sections 2(a)(iv)(B) and (C)
hereof), in substitution for (i) the letter of credit referred to in clause
(a) of this definition or (ii) any letter of credit previously issued in
accordance with the terms hereof (including Sections 2(a)(iv)(B) and (C)
hereof) in substitution for the letter of credit referred to in clause (a)
of this definition.
"Net Uncovered Losses" means Net Losses, up to an aggregate amount equal
to ten percent (10%) of the Auto Loan Balance, which are incurred after the
Net Initial Losses have been incurred.
"Obligor" means, with respect to an Acquired Loan, the Person primarily
obligated to make payments in respect thereto.
"Originator" means the originator of an Acquired Loan.
"Originator Agreement" means the agreement pursuant to which Advantage or
NAFCO, as the case may be, originally acquired an Acquired Loan.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, limited liability company, trust,
association, joint venture, governmental authority or any other entity of
whatever nature.
"Precomputed Auto Loan" means any Acquired Loan under which earned
interest (which may be referred to in the Acquired Loan as an "add-on finance
charge") and principal is determined according to the sum of periodic balances
or the sum of monthly balances or the sum of digits or any equivalent method
commonly referred to as the "Rule of 78s."
"Procedures" means the agreed upon accountants' review procedures set
forth on Exhibit P-1 attached hereto.
"Proceeds" means, with respect to a Defaulted Acquired Loan, any cash
amounts received in connection with the liquidation of such Defaulted Acquired
Loan, whether through foreclosure sale or other final disposition of such
Defaulted Acquired Loan or the related Automobile (other than Insurance
Proceeds), and any other cash amounts received in connection with the sale or
other disposition of such Defaulted Acquired Loan or the related Automobile.
"PSB's Accountants" means, at any time, the firm of independent
accountants retained by PSB, which, initially, shall be KPMG Peat Marwick.
"Related Parties" means, collectively, PSB, NAFCO, and Advantage.
"Reported Net Losses" shall have the meaning set forth in Section
2(b)(i) hereof.
"Repurchased Auto Loan" means any Acquired Loan repurchased (a) pursuant
to Section 4 of the Advantage Loan Purchase Agreement, or (b) pursuant to
Section 4 of the NAFCO Loan Purchase Agreement.
"Responsible Officers" means, with respect to any Person, the President,
any Executive Vice President, any Senior Vice President, the Chief Financial
Officer, the servicing manager, and any other officer of such Person having
responsibility or knowledge of the matters being reviewed.
"Scheduled Payment" means each payment due in respect of, and in
accordance with the provisions relating to, any Acquired Loan.
"Servicer" means the servicer of an Acquired Loan.
"Servicing Agreement" means an agreement pursuant to which a third party
Servicer agrees to service the Acquired Loans.
"Settlement Accountants" means Deloitte & Touche, L.L.P.
"Stated Amount" means, at any time any determination thereof is to be
made, the maximum amount available to be drawn under the Letter of Credit
without regard to whether any conditions to drawing could then be met.
"Unpaid Principal Balance" means, at any time any determination thereof
is to be made with respect to any Defaulted Acquired Loan: (a) if such
Defaulted Acquired Loan is an Auto Loan bearing interest calculable on a
simple interest basis, the then unpaid principal amount of Defaulted Acquired
Loan; or (b) if such Defaulted Acquired Loan is a Precomputed Auto Loan, the
then Net Principal Balance thereof.
Section 2. Covered Losses Reimbursement.
(a) Reimbursement for Covered Losses. On the Closing Date, the
Related Parties shall cause the Letters of Credit to be issued for the benefit
of Monaco and the Designee(s).
(i) Maximum Covered Losses. Monaco and the Designee(s)
may make a drawing under the Letters of Credit solely in accordance with the
terms and conditions thereof and the terms and conditions set forth herein
and, specifically, in Section 2(a)(ii) hereof. Neither Monaco nor any of
the Designees shall be entitled to be reimbursed for Covered Losses (whether
under the Letters of Credit, this Agreement, or otherwise) in an aggregate
amount in excess of fifteen percent (15%) of the Auto Loan Balance; provided
that the foregoing shall not limit Monaco's and/or any Designee's right to a
drawing in accordance with Section 2(a)(ii)(A)(2) and/or Section
2(a)(ii)(B)(2) hereof.
(ii) Timing and Amount of Drawings.
(A) All drawings under the Net Initial Losses Letter
of Credit shall be made solely in accordance with the terms thereof. Monaco
(or the Designee(s)) shall be entitled to make a drawing under the Net Initial
Losses Letter of Credit: (1) for any Net Initial Losses detailed in a Net
Losses Report one (1) Business Day following the date such report and the
related Accountants' Letter have been delivered to PSB in accordance with
Section 2(b)(i); and (2) for the Stated Amount thereof on or within five (5)
Business Days of the current expiration date of such Letter of Credit if it is
not extended or an alternative Letter of Credit (issued in accordance with the
terms hereof) is not provided prior to five (5) Business Days prior to the
current expiration date of such Letter of Credit.
(B) All drawings under the Net Subsequent Losses
Letter of Credit shall be made solely in accordance with the terms thereof.
Monaco (or the Designee(s)) shall be entitled to make a drawing under the Net
Subsequent Losses Letter of Credit: (1) for any Net Subsequent Losses
detailed in a Net Losses Report one (1) Business Day following the date such
report and the related Accountants' Letter have been delivered to PSB in
accordance with Section 2(b)(i); and (2) for the Stated Amount thereof on or
within five (5) Business Days days of the current expiration date of such
Letter of Credit if it is not extended or an alternative Letter of Credit
(issued in accordance with the terms hereof) is not provided prior to five (5)
Business Days prior to the current expiration date of such Letter of Credit.
(iii) Excess Drawings. If:
(A) pursuant to Section 2(b)(iv), either (1)
Monaco's Accountants and PSB's Accountants have resolved all exceptions
contained in an Exception Report (including, without limitation, the
determination of the actual amount of a disputed Net Loss which is a Covered
Loss), or (2) the Settlement Accountants have resolved the exceptions
contained in an Exception Report (including, without limitation, the
determination of the actual amount of a disputed Net Loss which is a Covered
Loss); and, as a result of such resolution and/or determination, the amount of
drawings made by Monaco and/or the Designee(s) under any Letter of Credit at
the time of such determination exceeds the amount to which Monaco and/or the
Designee(s) were otherwise entitled to draw; or
(B) a Net Losses Report indicates that, as a result of
the receipt of actual Net Recoveries, the amount of drawings made by Monaco
and/or the Designee(s) under any Letter of Credit exceeds the amount to which
Monaco and/or the Designee(s) were otherwise entitled to draw (any excess
amount under Section 2(a)(iii)(A) or this Section 2(a)(iii)(B) being an
"Excess Amount");
then such Excess Amount shall be subtracted from the next succeeding amount of
Covered Losses for which Monaco and/or the Designee(s) may draw under the
Letters of Credit; provided that, if no such succeeding amount may be drawn,
Monaco shall (or shall cause the Designee(s) to) refund, within ten (10) days
following written demand therefor, such amount to PSB together with interest
thereon from the date drawn until paid at the Federal Funds Rate; provided
that, if such amount is not repaid within thirty (30) days following demand
therefor, then the interest rate thereon shall thereafter automatically
increase to the Federal Funds Rate plus five percent (5%) per annum.
(iv) Changes to the Letters of Credit. If, at any time,
the Stated Amount of the Letters of Credit exceeds, by Two Hundred Fifty
Thousand Dollars ($250,000) or more, fifteen percent (15%) of the then Auto
Loan Balance minus the amount of all drawings previously made under the
Letters of Credit, then the Related Parties shall be entitled:
(A) to either: (1) on their behalf, cause the
issuance, in substitution for the then existing Net Initial Losses Letter of
Credit, by a Letter of Credit Bank of a new irrevocable stand-by letter of
credit, substantially in the form attached hereto as Exhibit N-1, with such
changes, if any, as Monaco and the Designee(s) may approve, and naming Monaco
and/or the Designee(s) as sole beneficiary(ies), in an original face amount
equal to the sum of (y) seven and one-half percent (7.5%) of the then Auto
Loan Balance minus (z) the amount of all drawings previously made under the
Net Initial Losses Letter of Credit; or (2) cause an amendment of the then
existing Net Initial Losses Letter of Credit to reduce the Stated Amount
thereof to an amount equal to the sum of (1) seven and one-half percent (7.5%)
of the then Auto Loan Balance minus (2) the amount of all drawings previously
made under the Net Initial Losses Letter of Credit; and
(B) to either: (1) on their behalf, cause the
issuance, in substitution for the then existing Net Subsequent Losses Letter
of Credit, by a Letter of Credit Bank of a new irrevocable stand-by letter of
credit, substantially in the form attached hereto as Exhibit N-1, with such
changes, if any, as Monaco and the Designee(s) may approve, and naming Monaco
and the Designee(s) as sole beneficiary(ies), in an original face amount equal
to the sum of (y) seven and one-half percent (7.5%) of the then Auto Loan
Balance minus (z) the amount of all drawings previously made under the Net
Subsequent Losses Letter of Credit; or (2) cause an amendment of the Net
Subsequent Losses Letter of Credit to reduce the Stated Amount thereof to an
amount equal to the sum of (1) seven and one-half percent (7.5%) of the then
Auto Loan Balance minus (2) the amount of all drawings previously made under
the Net Subsequent Losses Letter of Credit.
(C) Notwithstanding anything to the contrary contained
in this Section 2(a)(iv), no more than two (2) substitute letters of credit
and/or amendments to each Letter of Credit may be obtained under this Section
2(a)(iv) in any calendar year during the term hereof. All costs and expenses
of Monaco and/or any of the Designees incurred in connection with any such
substitute letters of credit and/or amendments to any Letter of Credit shall
be paid for by the Related Parties.
(b) Net Losses Reports.
(i) Delivery of Reports. No later than three (3)
Business Days prior to the fourteenth day of each calendar month during the
term of this Agreement, Monaco shall submit to PSB (and concurrently submit a
copy to PSB's Accountants and the Designee(s)) a Net Losses Report detailing
all Net Losses (for any period, the "Reported Net Losses") incurred during the
calendar month then ended or, in the case of the first Net Losses Report, if
applicable, during the period from the Cut-Off Date through the end of the
first calendar month following month of the Closing Date. Each Net Losses
Report submitted to PSB shall be certified as being true and correct in all
material respects and in compliance with this Agreement in all material
respects by the Chief Financial Officer of Monaco. Such Net Losses Report
shall also be accompanied by the related Accountants' Letter.
(ii) Accountants' Letters. Prior to submitting to PSB
the Net Losses Report required by Section 2(b)(i), Monaco shall submit a
draft Net Losses Report to Monaco's Accountants for review. Within five (5)
Business Days of receipt of such draft, Monaco's Accountants shall execute and
deliver (by fax on otherwise) a letter to Monaco (with respect to any draft
Net Losses Report, an "Accountants' Letter") stating that: (A) such
accountants have reviewed such draft Net Losses Report in accordance with the
Procedures; and (B) based upon such accountants' review, such accountants did
not have any exceptions to the calculations set forth therein.
(iii) Exception Reports. Each Net Losses Report
delivered to PSB shall be reviewed by PSB's Accountants in accordance with the
Procedures. Within ten (10) Business Days of receipt by PSB of the Net Losses
Report for each of the months of March, June, September, and December during
the term hereof, if PSB's Accountants shall, in connection with their review
of such Net Losses Report and the Net Losses Reports for the immediately
preceding two (2) calendar months, have noted any exceptions to such Net
Losses Reports, then PSB's Accountants shall deliver an exception report (with
respect to such Net Losses Reports, an "Exception Report") to PSB, Monaco, the
Designee(s), and Monaco's Accountants detailing such exception(s). Failure to
timely deliver an Exception Report on or before the expiration of the ten (10)
Business Day review period set forth above shall constitute PSB's acceptance
of each of the related Net Losses Reports.
Resolution of Exceptions. If an Exception Report is timely delivered,
Monaco's Accountants and PSB's Accountants shall attempt to resolve the
exceptions noted therein (including, without limitation, the amount of any
disputed Net Loss(es) or the amount of any excess drawing(s) under any Letter
of Credit). If Monaco's Accountants and PSB's Accountants cannot resolve the
exceptions within five (5) Business Days following the delivery of a timely
Exception Report, such accountants shall jointly submit the applicable Net
Losses Report(s) and the related Exception Report(s) to the Settlement
Accountants. Within ten (10) Business Days of receiving such documents, the
Settlement Accountants shall finally and conclusively resolve all exceptions
(including, without limitation, the amount of any disputed Net Loss(es) or the
amount of any excess drawing(s) under any Letter of Credit). The costs and
expenses of the services of the Settlement Accountants shall be paid equally
by Monaco and PSB.
Section 3. Covenants of Monaco.
(a) Compliance with Laws. Monaco shall comply in all material
respects with all applicable laws, rules, regulations and orders with respect
to it, its business and properties and all Acquired Loans.
(b) Inspection. Monaco shall provide, and shall use its best
efforts to cause each other Servicer, if any, to provide (and shall use its
best efforts to include an express covenant in the Servicing Agreement
requiring such Servicer to provide) PSB and its authorized agents and
representatives (i) reasonable access during regular business hours to all
records of Monaco and such Servicer relating to the Acquired Loans and any
assets related thereto and (ii) reasonable access during normal business hours
to Responsible Officers of Monaco and such Servicer to provide information and
answer questions concerning the Acquired Loans and any assets related thereto.
Any on-site examination pursuant to this paragraph shall be conducted in a
manner that does not unreasonably interfere with Monaco's or such Servicer's
normal operations, and all fees and expenses incurred by PSB in connection
with any such examination shall be borne by PSB.
(c) Servicing Reports. Monaco shall, with respect to each Acquired
Loan for which it is the Servicer, and shall use its best efforts to cause
each other Servicer, if any, to (and shall use its best efforts to include an
express covenant in the Servicing Agreement requiring such Servicer to), (i)
provide to PSB the servicing reports specified and described in, and at the
times set forth in, the Servicing Agreement ("Servicing Reports") with respect
to the Acquired Loans serviced by such Servicer and (ii) provide to PSB such
other information related to the Acquired Loans or any assets related thereto
as PSB may reasonably request. Monaco shall, with respect to each Acquired
Loan for which it is the Servicer, and shall use its best efforts to cause
each other Servicer to (and shall use its best efforts to include an express
covenant in the Servicing Agreement requiring such Servicer to), prepare
separate Servicing Reports covering only the Acquired Loans serviced by such
Servicer.
(d) Standard of Care. Irrespective of whether Monaco (and/or the
Designee(s)) shall have made a drawing under the Letter(s) of Credit with
respect to any Acquired Loan that is a Defaulted Acquired Loan, Monaco shall,
with respect to each Acquired Loan for which it is the Servicer, and shall
require that each other Servicer, if any, (and shall include an express
covenant in the Servicing Agreement requiring such Servicer to) to, in
managing, administering, servicing, enforcing and making collections on the
Acquired Loans serviced by it and the related Automobiles, exercise that
degree of skill, care, prudence and diligence consistent with customary and
usual standards of practice of prudent institutional servicers of motor
vehicle loan portfolios of credit quality similar to the Acquired Loans, and
with at least the same degree of skill, care, prudence, and diligence which
the applicable Servicer customarily exercises with respect to motor vehicle
loan contracts of similar credit quality and interest in motor vehicle loans
owned or originated by it.
(e) Servicer Replacement. Except to the extent Monaco is required
to change or terminate any Servicer in connection with a securitization or
warehouse facility transaction, Monaco shall not change or terminate any
Servicer without the prior written consent of PSB, which consent shall not
unreasonably withheld; provided that Monaco may, without the consent of PSB,
terminate either Electronic Data Systems or CSC Logic/MSA L.L.P. d/b/a Loan
Servicing Enterprises as Servicer as long as Monaco is the successor Servicer.
Monaco shall not permit any material change to any servicing procedures or
standards applicable to any Acquired Loan which would have the effect of
lowering existing servicing standards, without the prior written consent of
PSB which consent shall not be unreasonably withheld.
(f) Certain Actions. Monaco shall, with respect to each
Acquired Loan for which it is the Servicer, and shall use its best efforts to
cause each other Servicer, if any (and shall use its best efforts to include
an express covenant in the Servicing Agreement requiring such Servicer to),
to, pursue reasonable remedies available against the applicable Obligor and
Originator in order to minimize Net Losses with respect to each Acquired Loan.
Section 4 Representations and Warranties of Monaco.
(a) Organization and Good Standing. Monaco is a corporation
duly organized, validly existing and in good standing under the law of the
State of Colorado and is qualified to do business in each other state where
the nature of its business requires it to qualify, except to the extent that
the failure to so qualify would not in the aggregate materially adversely
affect the ability of Monaco to perform its obligations hereunder.
(b) Authorization. Monaco has the power, authority and legal
right to execute, deliver and perform under the terms of this Agreement and
the execution, delivery and performance of this Agreement has been duly
authorized by Monaco by all necessary corporate action.
(c) Binding Obligation. This Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of Monaco, enforceable
against Monaco in accordance with its terms except that (i) such enforcement
may be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws (whether statutory, regulatory or decisional) now or hereafter in
effect relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to certain equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought, whether a proceeding at law or in
equity.
(d) No Violation. The consummation of the transactions
contemplated by the fulfillment of the terms of this Agreement will not
conflict with, result in any breach of any of the terms and provisions of or
constitute (with or without notice, lapse of time or both) a default under the
organizational documents or bylaws of Monaco, or any indenture, agreement,
mortgage, deed of trust or other instrument to which Monaco is a party or by
which it is bound, or in the creation or imposition of any lien upon any of
its properties pursuant to the terms of such indenture, agreement, mortgage,
deed of trust or other such instrument, or violate any law, or any order, rule
or regulation applicable to Monaco of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over Monaco or any of its properties.
(e) Approvals. All approvals, authorizations, consents,
orders or other actions of any person, or of any court, governmental agency or
body or official, required in connection with the execution and delivery of
this Agreement have been or will be taken or obtained on or prior to the
Closing Date.
Section 5. Representations, Warranties, and Covenants of the Related
Parties.
(a) Organization and Good Standing. PSB is a bank duly
organized, validly existing and in good standing under the laws of the United
States of America and is qualified to do business in each other State where
the nature of its business requires it to qualify, except to the extent that
the failure to so qualify would not in the aggregate materially adversely
affect the ability of PSB to perform its obligations hereunder. NAFCO is a
limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware and is qualified to do
business in each other state where the nature of its business requires it to
qualify, except to the extent that the failure to so qualify would not in the
aggregate materially adversely affect the ability of NAFCO to perform its
obligations hereunder. Advantage is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
qualified to do business in each other state where the nature of its business
requires it to qualify, except to the extent that the failure to so qualify
would not in the aggregate materially adversely affect the ability of
Advantage to perform its obligations hereunder.
(b) Authorization. Each of the Related Parties has the power,
authority and legal right to execute, deliver and perform under the terms of
this Agreement and the execution, delivery and performance of this Agreement
has been duly authorized by each of the Related Parties by all necessary
corporate or other necessary action.
(c) Binding Obligation. This Agreement, assuming the due
authorization, execution and delivery hereof by Monaco, constitutes a legal,
valid and binding obligation of each of the Related Parties, enforceable
against each of the Related Parties in accordance with its terms except that
(A) such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws (whether statutory, regulatory or decisional)
now or hereafter in effect relating to creditors' rights generally and (B) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to certain equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought, whether a
proceeding at law or in equity.
(d) No Violation. The consummation of the transactions
contemplated by the fulfillment of the terms of this Agreement will not
conflict with, result in any breach of any of the terms and provisions of or
constitute (with or without notice, lapse of time or both) a default under the
organizational documents or bylaws, as applicable, of each of the Related
Parties, or any indenture, agreement, mortgage, deed of trust or other
instrument to which any of the Related Parties is a party or by which any of
the Related Parties is bound, or in the creation or imposition of any lien
upon any of its properties pursuant to the terms of such indenture,
agreement, mortgage, deed of trust or other such instrument, or violate any
law, or any order, rule or regulation applicable to any of the Related Parties
of any court or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over any of the
Related Parties or any of their respective properties.
(e) Approvals. All approvals, authorizations, consents,
orders or other actions of any person, or of any court, governmental agency or
body or official, required in connection with the execution and delivery of
this Agreement have been or will be taken or obtained on or prior to the
Closing Date.
(f) Letter of Credit Bank. Notwithstanding anything to
the contrary contained herein, the Related Parties shall use their best
efforts to have each Letter of Credit Bank be a financial institution referred
to in clause (a) or clause (b) of the definition of "Letter of Credit
Bank" contained herein. The use of such Persons' best efforts shall include,
but not be limited to, the provision of cash collateral to fully secure the
Related Parties' (or any of their) reimbursement obligations to such financial
institution in respect of the Letter(s) of Credit.
Section 6 No Third Party Beneficiary. Except as contemplated by
Section 9 hereof, no creditor or third party having dealings with Monaco
shall have the right to enforce the duties or obligations of any of the
Related Parties hereunder or to pursue any other right or remedy hereunder or
at law or in equity, it being understood and agreed that the provisions of
this Agreement shall be solely for the benefit of, and may be enforced solely
by, Monaco and the Designee(s).
Section 7 Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
and delivered as to each party hereto, the Designee(s), the Monaco
Accountants, and the PSB Accountants, by a nationally recognized overnight
courier, at its address set forth as follows:
To Monaco and/or the Designee(s):
Monaco Finance, Inc.
370 17th Street, Suite 5060
Denver, Colorado 80202
Attention: Irwin Sandler
Phone: (303) 592-9411
Fax: (303) 405-6496
To PSB, NAFCO, or Advantage:
c/o Pacific USA Holdings Corp.
5999 Summerside Drive, Suite 112
Dallas, Texas 75252
Attn: Michael K. McCraw
Phone: (972) 248-5022
Fax: (972) 248-5023
With a copy to:
Pacific USA Holdings Corp.
3200 Southwest Freeway, Suite 1220
Houston, Texas 77027
Attn: Cathryn L. Porter
Phone: (713) 871-0111
Fax: (713) 871-0155
Monaco's Accountants:
Ehrhardt, Keefe, Steiner & Hottman
7979 E. Tufts Avenue, Suite 400
Denver, Colorado 80237
Attn: Steven L. Schenbeck
Phone: (303) 740-9400
Fax: (303) 740-9009
PSB's Accountants:
KPMG Peat Marwick
200 Crescent Court, Suite 300
Dallas, Texas 75201
Attn: Stan Peebles
Phone: (214) 754-2000
Fax: (214) 754-2297
All such notices and communications shall not be effective until received by
the party to whom such notice or communication is addressed.
Section 8 No Waiver; Remedies. No failure on the part of either
party to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any other remedies provided by law.
Section 9 Binding Effect; Assignability. This Agreement shall be
binding upon and inure to the benefit of the parties hereto, and their
respective successors and permitted assigns. None of the Related Parties may
assign its rights or obligations under this Agreement without the express
prior written consent of Monaco. Notwithstanding anything to the contrary
contained in Section 6hereof, Monaco may assign all of its rights hereunder
(including, without limitation, its rights to receive payments for Covered
Losses, its rights to enforce the duties and obligations of the Related
Parties hereunder with respect to any Acquired Loan, and its rights under and
with respect to the Letter of Credit) upon prior written notice of the same to
PSB of the identity of such assignee and the terms of the assignment;
provided that such assignment may be made by Monaco solely: (a) in
connection with a securitization or warehouse facility transaction; and (b) in
connection with any such securitization or warehouse facility transaction, to
the trustee or the servicer or to a subsidiary of Monaco that is a special
purpose entity. PSB shall have no right to consent to or otherwise approve or
disapprove any such assignee; however, Monaco shall provide PSB a copy of the
executed assignment document (and all other documents which relate to such
assignment) within five (5) Business Days of the execution thereof. Except as
otherwise permitted under this Section 9, Monaco may not assign its
obligations hereunder (including but not limited to all obligations of Monaco
under Sections 2 and 3 hereof) or otherwise assign its rights hereunder
without the express prior written consent of PSB.
Section 10 Amendments; Consents and Waivers; Entire Agreement. No
modification, amendment or waiver of, or with respect to, any provision of
this Agreement, and all other agreements, instruments and documents delivered
thereto, nor consent to any departure by any party from any of the terms or
conditions thereof shall be effective unless it shall be in writing and signed
by each of the parties hereto (including any Designee(s)). Any waiver or
consent shall be effective only in the specific instance and for the purpose
for which given. This Agreement and the documents referred to herein embody
the entire agreement of the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings relating to the
subject hereof.
Section 11 Securitization Matters. Notwithstanding anything to the
contrary contained herein, each of the parties hereto agrees that, in
connection with any securitization transaction contemplated under Section 9
hereof, such party shall take such actions (including, without limitation, the
amendment or modification of this Agreement or the Letter of Credit and the
delivery of opinions of counsel) as shall be reasonably required by MBIA
Insurance Corporation (or similar entity) and/or any rating agency involved in
any such securitization transaction; provided that Monaco shall pay all of
the reasonable out-of-pocket expenses, including, without limitation,
attorneys' fees, incurred by each such party in taking such action(s);
provided further that no party hereto shall be required to take any such
action if, in the good faith determination of such party, such action would
materially and adversely affect such party.
Section 12 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation, shall not in
any way be affected or impaired thereby in any other jurisdiction.
Section 13 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL.
(A) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS.
(B) IN ANY LEGAL ACTION RELATING TO THIS AGREEMENT OR
RELATING TO ANY OTHER DEALINGS AND NEGOTIATIONS BETWEEN THE PARTIES, EACH
PARTY AGREES (I) TO THE EXERCISE OF JURISDICTION OVER IT BY A FEDERAL COURT
SITTING IN DALLAS, TEXAS OR DENVER, COLORADO; AND (II) IF EITHER PARTY BRINGS
A LEGAL ACTION, IT SHALL BE INSTITUTED IN ONE OF THE COURTS SPECIFIED IN
SUBPARAGRAPH (I) ABOVE.
(C) THE PARTIES EACH HEREBY WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY LEGAL ACTION WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR IN CONNECTION WITH
THIS AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A
BENCH TRIAL WITHOUT A JURY.
Section 14 Termination of Agreement. This Agreement shall
terminate upon the earlier of (a) the reimbursement to Monaco (or its assigns
under Section 9 hereof) of all Covered Losses required to be reimbursed
under Section 2(a) hereof, or (b) the date all Acquired Loans have either
been paid in full, or become Defaulted Acquired Loans and any amounts
reimbursable to Monaco in accordance with Section 2 hereof have been paid to
Monaco (or its assigns under Section 9 hereof). Upon termination of this
Agreement, Monaco shall deliver to the Related Parties a written termination
and release of this Agreement.
Section 15 Execution in Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and both of which when taken
together shall constitute one and the same agreement.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
PACIFIC SOUTHWEST BANK,
a federally chartered savings bank
By: /s/ Bobby Hashaway
Name: Bobby Hashaway
Title: Executive Vice President
NAFCO HOLDING COMPANY, LLC,
a Delaware limited liability company
By: /s/ Robert Womack
Name: Robert Womack
Title: Chief Financial Officer
ADVANTAGE FUNDING GROUP, INC.,
a Delaware corporation
By: /s/ Robert Womack
Name: Robert Womack
Title: Vice President
MONACO FINANCE, INC.,
a Colorado corporation
By: /s/ Irwin L. Sandler
Name:
Title: Executive Vice President
EXHIBIT E-1
EXPENSE CATEGORIES AND LIMITATIONS
1. All costs related to the sale of a vehicle:
-- Auction
-- Sales fees
-- Commissions
2. All costs related to repossessions of vehicles paid to outside
parties:
-- Repossession fees
-- Skip Tracing fees
-- Storage fees
-- Investigation fees
-- Transport fees
-- Legal fees and court costs
3. All repair costs of repossessed and abandoned vehicles:
-- Non-insured repair costs
-- Insured repair costs subject to subsequent reimbursement
-- Repair costs for abandoned vehicles
-- Repair costs for skips
4. Force Placed or VSI insurance premiums
EXHIBIT 99.03
AGREEMENT OF JOINT FILING
Pursuant to Rule 13d-1(f) promulgated under the Securities Exchange Act
of 1934, as amended, the undersigned persons hereby agree to file with the
Securities and Exchange Commission, the Statement on Schedule 13D (the
"Statement") to which this Agreement is attached as an exhibit, and agree that
such Statement, as so filed, is filed on behalf of each of them.
This Agreement may be executed in counterparts, each of which when so
executed shall be deemed to be an original, and all of which together shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement.
Dated: March 13, 1998
Pacific Southwest Bank Pacific USA Holdings Corp.
By: /s/ Gerald Hartman By: /s/ Bill C. Bradley
-------------------------- -------------------------------
Gerald Hartman Bill C. Bradley
Chief Executive Officer Chief Executive Officer
Pacific Financial Group, Inc. Pacific Electric Wire & Cable Co., Ltd.
By: /s/ Sun Tao-tsun By: /s/ Tung Ching-yun
------------------------ -----------------------------
Sun Tao-tsun Tung Ching-yun
Chief Executive Officer Vice President
First CF Corporation Consumer Finance Holdings, Inc.
By: /s/ Bobby Hashaway By: /s/ Bill C. Bradley
---------------------------- -----------------------------
Bobby Hashaway Bill C. Bradley
Chief Executive Officer Chief Executive Officer
